By on October 23, 2009

That bird is done. Picture courtesy

A certain website that concerns itself with facts about automobiles, had opined more than a month ago: “Once matters move to Brussels, they come to a crawl. Whoever wins the German elections has all the time they want to dispose of Opel. If it goes kaput, they can blame the Americans and Brussels.”

The Opel matter finally moved to Brussels. EU competition commissioner Neelie Kroes said, she could set aside her considerable qualms about the GM-Opel-Magna-Sperbank deal, if only all parties involved would send her a simple letter that certifies that the deal had not been reached under political pressure. All parties involved, meaning GM, the Opel Trust that officially owns Opel, and the German government. Scout’s honor. Cross your heart, and swear to … exactly.

Ms. Kroes stuck a monstrous Morton’s fork into the deal: If the letters are sent, and if an EU probe finds that there was pressure, then the authors can be subject to painfully substantial fines, the €1.5b bridge loan may have to be refunded, Opel is dead, all parties involved will be in a world of hurt.

If the letters are not sent, then the deal is dead because the EU will sprout a Brussels-sized inquisition, they will not approve the deal because the parties concerned will have already admitted that there was pressure, the bridge loan may have to be refunded, all parties involved will be in a world of hurt.

Was there pressure? Do ursines defecate in the forest? From Berlin on down through the states to the unions, one thing was made clear: No Magna, no money. There was so much pressure that meetings were only survivable wearing a diving helmet. There was so much pressure that Berlin’s own boys in the Opel Trust complained about telephone terror by politicians. In the end, Manfred Wennemer as representative of the Berlin government voted against, and Dirk Pfeil as representative of the states abstained when the Opel Trust had to decide on accepting the deal. The deal was approved with the votes of the GM representatives, who hated it, but had a German gun to their heads. There was so much pressure that Wennemer was lambasted in Berlin after the vote.

GM had been under so much pressure that their lawyers undoubtedly said such a letter would amount to a suicide note. There is no letter from GM. Instead, it was leaked all over the German press that GM has serious legal issues with such a note. “We were given no other alternative than Magna,” an unnamed GM source is quoted in Financial Times. Translation: “Hell yes, we’ll readily admit there was pressure!”

The Opel Trust is likewise hesitant when it comes to penning a letter to Nellie. “We haven’t sent a letter to Brussels,” Opel Trust member Dirk Pfeil said to the Frankfurter Allgemeine. Pfeil had never liked the Opel deal.

The only party to send a letter to Brussels was the German government. Economy Minister von und zu Guttenberg assured Kroes that the €4.5b would be open to any Opel buyer on a strictly non-discriminatory basis. Easy for him to say. He also was against the Magna deal, approved it only for reasons of political expedience. Now that the elections are over, and his boys have won, von Guttenberg would like nothing more than pressure from Brussels. He could blame it on Brussels, could say “we tried our best,” and could renegotiate the whole deal until Opel dies.

Opel would not survive the operation. Opel is running out of time and out of money. According to the Financial Times, Berlin’s €1.5b bridge loan will be burned by the end of the year, in light of a current cash conflagration to the tune of €300m a month.

And who puts a happy face on the whole ordeal? Fritz “the Cat” Henderson. He expects the Opel deal to close this week, says Reuters. Is there a doctor in the house?

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13 Comments on “Brussels Impales Opel With Giant Fork. Turkey In Serious Condition...”

  • avatar
    Tricky Dicky

    Thanks for the historical insight of a “Morton’s Fork” Bertel. I’d not heard that before. Maybe Morton’s logic principles were subsequently used for identifying witches with the ducking stool?

    Living in Brussels, this is the maddest thing I have heard in a very long time to come out of the EC. Neelie Kroes certainly doesn’t want to be blamed for the massive haircut that Opel would have to go through if the Magna deal doesn’t progress in time. She knows Count Guttenberg will point the naughty finger at her.

    Henderson appears clueless as to what is actually going on saying that the Magna deal is the best one for GM. I think he means “on that day, at that specific point in time, with what we are aware of this morning”. But still, another day, another crisis, another direction can be taken. He is the proverbial weather cock, only moving to show the direction of the wind.

    It seems to me that no one really wants to get this deal signed (apart from the workers in the plants). And I think I know why. Apparently the contract is 2,000 pages long, and according to german Law, all signatories must be present as the entire contract is read aloud, BEFORE they can sign it.

  • avatar

    According to german Law, all signatories must be present as the entire contract is read aloud, BEFORE they can sign it.

    Very true. And the lucky Notary Public, who is chosen to do the reading, will make a fortune for doing the reading. They get a percentage of the deal.

  • avatar

    Kudos to the use of “ursines”!

    2k pages in one reading? As a guy that has done a lot of automotive contract work myself, I wonder how they can get thru that many pages and detail before most keel-over from boredom …

    Exactly, how does such a reading work? Is there one notary reading to an auditorium? Or do they break it up so that several notaries read to different stv. groups which give a red or green light to the one having responsibility for signing?

  • avatar
    Mr Carpenter

    Well, Opel, it’s been lots of fun but since you are now laying in critical care “mit” knife (fork?) sticking out of your back (or are they multiple knives and forks?) it seems I must admit that I’m sorry I didn’t consumate that deal with the beautiful little blue 1900 station wagon back in 1975. Not that it would have saved the day for you now, but I just had to tell you that, Frau Opel….

    Seriously, though. Opel is finished. Stick a …. oh, wait.

    Never mind.

  • avatar

    This would solve very simple is GM moves some of its NA money to Opel and Daewoo.

    Of course, this depends on new GM overlords to cease on their myopia and realise that GM’s future without these 2 strategic international operations is similar to the Chrysler one.

    Governments are not particularly known for being that smart.

    Does the German law allow a C11, or insolvency is the equivalent of kaput?

  • avatar

    Does the German law allow a C11, or insolvency is the equivalent of kaput?

    I recall Bertel may have answered this sometime ago. Germany had to drop their semi-equivalent of a US Ch11 as part of EU rules, so no they don’t have it anymore I believe.

  • avatar

    I’m not so sure the Magna deal is dead. I wish it were, for all concerned.

    But this looks to me, as an admittedly inexpert Brussels watcher, like political posturing. Not a true crusade against the deal.

    I think Frank Stronach will still push the deal through. The guy is pretty bull-headed. He’s wanted a car company for years, and nearly bought Chrysler when Cerberus bought it instead. I think he gets Opel. And then a year from now wishes he hadn’t.

  • avatar

    Germany and the other involved European countries know that if the deal goes through they will be pouring out $billions to protect a relative handful of jobs at a company that will likely fail anyway due to competition.

    My gut feel is that, to mitigate this future, inevitable drain, Germany et al are trying to pressure GM/Washington into putting money on the table to bail out the deal. The payoff for the Obama administration would be that GM will last longer if it can dump Opel, which gives the Democrats more time to ginn up a political exit from their Debacle In Detroit. As a side benefit, Opel’s failure would happen to someone else.

  • avatar

    I love the headline.

    I don’t care anything about Opel, but seriously how can the EU keep a straight face about this when they allow Britain, France, Germany, et al. to give EADS Airbus all kinds of money to fight Boeing?

  • avatar

    how can the EU keep a straight face about this when they allow Britain, France, Germany, et al. to give EADS Airbus all kinds of money to fight Boeing?

    You don’t think Boeing get any US Government money?

    We could play this game all day.

  • avatar

    “Very true. And the lucky Notary Public, who is chosen to do the reading, will make a fortune for doing the reading. They get a percentage of the deal.”

    Having to listen to the contract being read is amazing enough, but notaries getting a percentage of the transaction amount is incomprehensible. WTF??

    Thank God in America a person can become a notary for fifty bucks or so, and many of them don’t even charge a fee.

  • avatar
    Corky Boyd

    Ms Kroes is French. The French government owns a healthy chunk of Renault. The French government would be happier with one less manufacturer vying aganst Renault. It is within Ms Kroes’ power to make that happen.

    Bye bye Opel.

    Also, has anyone tallied up how much government subsidy goes into Renault’s F1 program? I guess that doesn’t count.

  • avatar

    You don’t think Boeing get any US Government money?

    Sure, Boeing gets money –for delivering products and services. As the WTO just reported, what Airbus gets is illegal subsidies. Boeing just reported big losses stemming from its inability to develop the 787 and 747-8 properly, but they can’t run to the US gov’t for help like Airbus can to its sugar daddies.

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