Opel: Brdelerle Denies Government Aid
So today’s the day when the fate of Opel was to be decided – according to plan. The committee met today – and decided to decide nothing. They couldn’t come to a conclusion. They handed the decision to Minister Brüderle. Brüderle’s decision: Nein. No government money to Opel, reports Focus. There still is a glimmer of hope for Opel …
Tomorrow, Thursday, Chancellor Angela Merkel will have a sit-down with the premiers of the Opel states. They will discuss alternatives.
As far as Opel and GM are concerned, there aren’t many alternatives. It’s either government money or not. Opel states and unions think that without government money, three out of four Opel plants in Germany will have to be closed. It could shutter all of Opel.
Even with a loan guarantee, Opel wouldn’t get the money, says the Financial Times Deutschland. The government usually guarantees for 90 percent, the remaining 10 percent of the risk are with the banks. No bank wants to carry that risk. Banks ask GM to cover the risk in cash.
A possible work-around would be the European Investment Bank (EIB). However, an EIB loan would also necessitate government guarantees. Opel would have to front the money first. The loan would also be limited to development projects such as electric cars. It would most likely attract the interest of Brussels. Maybe that’s what Berlin wants to get rid of the hot potato.
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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I just don't buy the Doomsday scenario for Opel. I think it is much more likely that GM will have to implement what Brüderle has been saying all along: "The American Solution". Which I guess is simply a working out of the CEO's promise: "We will pay for it ourselves". Time for Big-Ed to step up to the plate.
I think we all know that the $6.6B leftover money from the escrow account was going to be used to restructure Opel. GM has to go through the motions of asking for loans to justify why they will close down certain factories in countries that don't give them money.
I'm pretty sure Germany will eventually pay.
Rob Finrock -> GM's name is on Opel's title deeds. It's an American business situated in Europe. What you say is a bit like a father saying that he has no responsibility for the upkeep of one of his children, because the child resides in another state. Daanii2 - would love to know the basis for making such a statement.