Germany Answering Opel's Prayers? Not Exactly

by Bertel Schmitt

Updated: July 20th, 2011 Published: May 25th, 2010

germany answering opel s prayers not exactly

Pretty soon you’ll hear about a breakthrough for Opel, and that there will be state aid. If not, you’ve read it here first. In any case, treat the news carefully. Munich’s Süddeutsche Zeitung, usually well-informed in Opel matters, reports that the state of Thuringia offered help to Opel. The Süddeutsche calls it a “symbolic offer.”First, the offer is for €27.2m ($33.3m), a pittance for a company that lost $500m last year. Second, it’s tied to what the €300m state aid from Great Britain is also tied: Serious money from Germany’s federal government.Two other German states are expected to offer money, under the same conditions. One of the two already denied that they had made a decision. Nick Reilly told the Handelsblatt today that Poland wants to help, and that Spain promised an answer within the next then days. Any offers of cash will come with the usual caveat: We’ll give if Berlin pays the lion’s share. Opel would like to collect €1.8b, they expect €1.3b from Germany.Today, another of the many committees that have to approve money for Opel is meeting, but nobody expects a decision. They will most likely pass the decision on to the next committee.Meanwhile in Berlin, Economy Minister Rainer Brüderle sees no reason for undue haste. He thinks, a decision will come “end of May, beginning of June,” says Der Westen. Most observers, Reilly included, don’t expect a decision before June.Berlin gives GM more reason to regret their “payback” ad. Brüderle makes ominous noises about GM doing well, that they “intensively think about going public,” that they repay their debt before it’s due. Sales are also good. Subliminal message: Do they really need our money?As in “if Mrs. Merkel declines help, we will pay for it ourselves. Maybe this will make your chancellor happy.”Update: More delays. The steering committee wanted to convene today. But there was no quorum. Several members didn’t think the matter was worthy of their appearance. Now, the matter will be solved via “Umlaufverfsahren”, or circular resolution: The files will be sent from one member to the other, for a Ja or Nein. That can take yet another week. Then, on to the next committee.

#BertelSchmitt #Brüderle #Germany #GovernmentAid #Opel #StateAid

Bertel Schmitt

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.

More by Bertel Schmitt

Comments

Join the conversation

2 of 4 comments

Herb on May 25, 2010

I don't think this is a pure money issue. Aside from the fact that there simply is no money left anymore it would be an unfair act against European GM competitors. They easily could come under pressure sooner or later and may then have a reason to cry for government help, as well. Who is going to pay for that? People already on the dole or in retirement? This does not compute.

Like Reply
Lorenzo on May 25, 2010

I've always been fascinated by German organizational skills and efficiency. I was initially taken aback by the seemingly disorganized temporizing over Opel, but I think I've caught on. The endlessly indeterminate decision process is actually an efficient, highly choreographed dance. Even apparent bumbling is conducted with typical German precision. I finally realized it when there was a delay due to lack of a quorum, requiring even more delay-inducing individual notification. Brilliant!

Like Reply

Recent Comments

Kjhkjlhkjhkljh kljhjkhjklhkjh A prelude is a bad idea. There is already Acura with all the weird sport trims. This will not make back it's R&D money.
Analoggrotto I don't see a red car here, how blazing stupid are you people?
Redapple2 Love the wheels
Redapple2 Good luck to them. They used to make great cars. 510. 240Z, Sentra SE-R. Maxima. Frontier.
Joe65688619 Under Ghosn they went through the same short-term bottom-line thinking that GM did in the 80s/90s, and they have not recovered say, to their heyday in the 50s and 60s in terms of market share and innovation. Poor design decisions (a CVT in their front-wheel drive "4-Door Sports Car", model overlap in a poorly performing segment (they never needed the Altima AND the Maxima...what they needed was one vehicle with different drivetrain, including hybrid, to compete with the Accord/Camry, and decontenting their vehicles: My 2012 QX56 (I know, not a Nissan, but the same holds for the Armada) had power rear windows in the cargo area that could vent, a glass hatch on the back door that could be opened separate from the whole liftgate (in such a tall vehicle, kinda essential if you have it in a garage and want to load the trunk without having to open the garage door to make room for the lift gate), a nice driver's side folding armrest, and a few other quality-of-life details absent from my 2018 QX80. In a competitive market this attention to detai is can be the differentiator that sell cars. Now they are caught in the middle of the market, competing more with Hyundai and Kia and selling discounted vehicles near the same price points, but losing money on them. They invested also invested a lot in niche platforms. The Leaf was one of the first full EVs, but never really evolved. They misjudged the market - luxury EVs are selling, small budget models not so much. Variable compression engines offering little in terms of real-world power or tech, let a lot of complexity that is leading to higher failure rates. Aside from the Z and GT-R (low volume models), not much forced induction (whether your a fan or not, look at what Honda did with the CR-V and Acura RDX - same chassis, slap a turbo on it, make it nicer inside, and now you can sell it as a semi-premium brand with higher markup). That said, I do believe they retain the technical and engineering capability to do far better. About time management realized they need to make smarter investments and understand their markets better.