By on March 23, 2010

Germany’s Economy Minister Rainer Brüderle poured cold water on hopes for a quick decision on state aid for GM’s ailing Opel. GM expects $2.5b in state aid to come from European countries, most of it from Germany. But Germany, represented by Reiner Brüderle, is dragging its heels.

In February, the German government had sent GM a list of 36 questions. By last Friday, no answers had been received in Berlin, therefore, nothing had to be decided in Berlin.

Finally, the catalog of questions has come back, reports Die Zeit. Now the “Credit Guarantee Committee” (“Bürgschaftsausschuss”) of the German government will convene on Wednesday.

They will have a pow-wow, but there will be no decisions tomorrow, said Brüderle today according to Focus Magazine.

The reason for the indecision? GM omitted the answer to the quintessential question: How much money will GM contribute?

GM had promised they would contribute $2.6b, but when the questionnaire came back, there was no formal commitment.

This will go on for a long time. Or until Opel runs out of money.

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5 Comments on “Germany To GM: No Money, No Honey...”

  • avatar

    Hopefully the money will never come – and flush out all this Opel silliness once and for all. I thought the German government was very clear when GM reneged the last time. They should stick to their guns.

    • 0 avatar

      The German government doesn’t stick to any guns anymore, that’s unfashionable these days. In a strictly non-violent way, they just wear the opposition down with endless delays and requests for more documentation.

  • avatar

    I don’t speak German but is that sign saying “Do NOT talk to the hand?”

  • avatar

    I wonder how Opel is doing and perceived – when I was in Germany in the 1980s, VW and Opel were neck in neck in battle with each other, similar to BMW and Mercedes (back then Mercedes was the undisputed no 1).

    If VW is clearly the number one, and Opel is a “damaged” brand, there would be not much of a case to bail them out. Mr. Schmitt, can you shed some light?

  • avatar

    Time is on the Europeans’ side. They can wait while pressure mounts on GM/Opel.

    It isn’t easy for Washington/GM/Opel to respond to Germany’s question “How much?”, because the reply must be couched in terms that conceal from American taxpayers the enormous, long-term commitment Washington et al must make to float Opel. The cash will flow in many forms, including:

    – an up-front figure that will be in the news.
    – a cleanup of Opel’s balance sheet (i.e. paying off creditors, topping up pensions, etc.).
    – shifting Opel’s R&D expenses back onto GM.
    – inflated transfer payments to Opel.
    – paying severence expenses & social costs for future Opel plant closings.
    – bribing “partners” to become involved in order to put a private-sector gloss on this pig.

    Why can’t Washington let Opel die? Because the failure of Opel would call the GM bailout into question. Saving the Obama administration and Congress from proof that tens of billions of dollars have been thrown down the rathole of a dying company is going to cost the American citizenry plenty.

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