GME To Rsselheim, Where Chaos Reigns
This week’s chronicle of the Opel saga starts with good news and bad news.
The good news: GM’s European headquarters will move from Zurich, Switzerland, to Opel’s home in Rüsselsheim near Frankfurt, Germany, reports Die Zeit. The paper: “With the move, the company probably wants to collect points to calm down the German government.” Let’s put it this way: Putting the European GM headquarters into a country that is not even part of the EU, that is more known for its tax haven status than for its flourishing auto industry, did not amuse the Germans. Returning to Deutschland, GM can pat itself on the back: The move created 150 jobs in Rüsselsheim, which are lost in Zurich.
The bad news: It’s too late to collect points.
Nobody knows how much keeping Opel open will cost anyway. GM figures it’s €3b, a number that is widely regarded as a pipe dream.
IG-Metall union boss Armin Schild, according to Rheinische Post. figures “the restructuring will cost €6b, probably more like €7b.”
Magna thought the price tag would be €4.5b
Moody’s, according to Reuters: €5.8B
KPMG, according to Reuters, reckoned in September it would be €4.1b
A good chunk of the money will be needed to get rid of workers. In Europe, unless you go bankrupt, you need to pay them off. If GM wants to shed 10,000 jobs in Europe, then that alone will cost them €2.5b over the next 18 months, Die Welt learned. Apparently, that little detail just had slipped by Whitacre.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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More amazing revelations. Thanks Bertel for the heads up on the severance payments. Here in Canada today, we get this in the National Post newspaper: "General Motors Co. may use some of the money it won from Canadian and U.S. taxpayers in the spring to fix its Opel unit in Europe in the months ahead as it works out a new financing plan for the money-losing business. That could include tapping funds pledged by the federal and Ontario governments, said Chris Preuss, new GM's vice-president of global communications." And TTAC reports today, with caveats of course: "GM plans to repay the United States, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December." Since the only money they have is the taxpayer loans, where do they expect to get the money to pay for Opel and pay back taxpayers at the same time? It just gets worse. Maybe they should earmark some funds to repair the roof leak at the Bochum plant outside the paint shop, as reported in Business Week.
Maybe I should put that sign on my bathroom door...