Opel: Going Nowhere, Slow

Pundits across the spectrum are still aflutter over the alleged final-honestly-we-mean-it-this-time-it’s-for-real-fer-sure sale of Opel to Magna and their Russian Sberbankers. Along with the geopolitical impact thereof. What they all miss: The deal may not go down. Especially not after GM laid down some outrageous “conditions” for the sale . . .

STRATFOR [sub] the not-so-poor man’s CIA, already sees the deal as a prelude to the sequel to the Molotov-Ribbentrop Pact, and threatens: “With Germany reasserting its independence and growing economically and politically closer to Russia, STRATFOR will keep a close eye on the developing U.S.-German relationship in Merkel’s second term.” Angela may dislike Obama, Stratfor muses, and cozy up to Vladimir, because “it will not escape her scrutiny that the U.S. government, which owns post-bailout GM, did not make any real effort to help her so close to the vote, and that the issue dragged on until two weeks before elections.

Then there are totally opposite rumors that just won’t die either: Obama, so the rumor goes, handed “Dear Angela” a (however hollow and highly conditional) victory to keep her in power, and to spoil a possible commie-coalition between Social Democrats, Die Linke (an assortment of old East German communist who have teamed up with the unemployed and impoverished) and the always left-leaning Green party.

It’s all bunk.

After TTAC has said it for months, Manfred Güllner, chief of the opinion research center Forsa told Der Spiegel: “I doubt that this will have a noteworthy influence [on the elections].” He sees most of the voting populace to be against bailouts anyway. Other pollsters agree: “Opel is not a topic for the elections,” said Andrea Wolf of Forschungsgruppe Wahlen.

With that out of the way, GM is back to its old tricks.

One day after the Opel/Magna decision had been announced, GM unleashed its first wave of the feared “conditions.” For a lack of chutzpa you can blame them not. Now GM wants a buy-back clause, a right of first refusal in case one of the investors (Magna or Sberbank) wants to get out, Der Spiegel writes. Amazingly adroit! Everybody knows that Sberbank doesn’t want to hold on to its shares longer than absolutely necessary, they want to sell them to GAZ , or maybe a yet to be founded Russian Leyland. With the clause, GM could grab the shares (if they can afford them).

What’s more, 35 percent owner GM demands half of the executive board seats on the eight person Opel board. For the next three years, at least. Oh, and GM wants the portfolios for “Marketing/Sales” and “Research & Development.” They graciously allow Magna to nominate the CEO and three others. With the executive board of Opel split 50:50 between lions and Christians, anything could happen at Opel, except cars. People had their doubts whether Opel will be viable. With this setup, nothing will happen, except murder in the executive dining room.

That’s just for starters. Who knows what else they will come up with.

(The longer I watch this, the more I believe that GM is already owned by China. The hurry up and wait, the sudden outlandish demands, the 540 degree pirouettes during negotiations, the insulting behavior, all that is straight out of Chinese Business Negotiations for Dummies. Except that GM is dealing with hard-derriered Germans who will have lost every bit of compunction after the elections.)

If GM won’t manage to suffocate the deal, then Brussels will. AP reports that “the European Union’s competition commissioner has warned she will take action if there is proof of any protectionism in the sale of General Motors Co.’s European unit Opel.” The Belgian government has lodged a complaint. They want their Antwerp plant to be kept open. But they haven’t put anything in the till.

Spain (Opel has a plant in Zaragosa) and the UK (Vauxhall has 5,500 workers in Luton and Ellesmere Port) are most likely next in line. And they are right. As the European Commission points out, “state aid cannot be subject to additional non-commercial conditions concerning the location of investments and/or the geographic distribution of restructuring measures.”

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. And the conspiracy theorists of all stripes can muse about “who killed Opel?”