Bailout Watch, German Edition, Zwei: "Angela, I'm Sorry. Opel Deserves Less"

by Bertel Schmitt

Published: November 14th, 2008

bailout watch german edition zwei angela i m sorry opel deserves less

A few days ago, GM CEO “Red Ink” Rick Wagoner told his man in Germany to ask the German government for €40b (and sundry other goodies.) Opel-Chief Hans H. Demant’s request was shot down in Berlin faster than a 747 over Kamchatka. In fact, Opel/GM’s mental sanity was publicly called into question. Deeply humbled, Demant has penned another letter to Berlin. We paraphrase in the spirit of brevity: “Dear Angela: I’m sorry I rubbed you the wrong way. Can you maybe spare €500m? No? How about €200m? Please! I’ll pay you back. Real soon, honest. Ever your humble servant (and master of 25700 jobs), I remain respectfully yours, Hans H. Demant.” You think we are kidding? Here’s the real rub-a-dub-dub:After the initial letter to Berlin was answered with invectives, Demant slashed his request for a handout down to 12.5 cents on the Euro. On Friday afternoon German time, an interview appeared in the on-line edition of Handelsblatt. In said publication, Demant suggested that the government could maybe co-sign a note for €500m. Reason given: “GM left us holding a huge baby of €1b in losses. All I’m asking for is half of it.” That request received at least minor eye movement in the state of Hesse, where most of Opel is located. The state’s Premier Koch promised to “think about it.”Quite possibly, the wheels in the premier’s brain jammed. A few hours yet later, Autohaus, daily fodder for Germany’s tortured car dealers, reported that Demant had scaled his request down further to a mere €200m. What’s less, Opel’s baby-holding chief begged Germany’s federal government, and all three states in which Opel has factories, to co-sign the note. Shared pain and all. To keep his options open, Demant asked for “at least €200m.” But the way this is going, on Monday, he’ll be happy with 2 mil.As the German working day came to a close, DPA caught up with Demant, and asked him squarely whether Opel is broke. “Not yet,” a humble Hans said hoarsely. Actually, he said: “Currently, we have no liquidity problem.” But come Monday…

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.

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TireGuy on Nov 14, 2008

As far as I see, the request is still for 1 bn Euro. Hessia is about to approve half of that. The whole request is no big surprise. The imminent bankruptcy of GM could endanger seriously Opel, although Opel is still profitable. Once suppliers would ask to be paid first, Opel would be toast. So there may be some reason to assist here to avoid that in the end Opel goes down because GM deserves bankruptcy.

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Stephan Wilkinson on Nov 15, 2008

I'm subscribing just to see where the rebbe goes with this.

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