Germany And Opel: Ve Do Nozzink

Bertel Schmitt
by Bertel Schmitt
germany and opel ve do nozzink

So, where does DC vs. Detroit leave Opel, Vauxhall et al.? The “private intelligence agency” Stratfor [very expensive sub] summed it up most succinctly: “Add to this the complexity of Opel, a German car maker owned by GM, which Germany wants the United States to bail out but which the United States wants nothing to do with, and the fundamental problem is clear: While both Germany and the United States have a common interest in moving past the crisis, Germany and the United States have very different approaches to the problem.”

Germany’s approach: Do nothing.

Berlin is making it increasingly clear that any Opel bailout hinges on what GM will do for Opel, on what DC will do for GM, and on the existence of a solid business plan. That’s a lot of hinges.

Opel’s first business plan was torn to shreds by Berlin months ago, a new one hasn’t arrived, so Berlin doesn’t need to do anything.

DC has just torn GM’s plans to shreds, so Berlin doesn’t need to do anything.

As for help from GM for Opel, GM doesn’t know how to help itself, so Berlin doesn’t need to do anything.

Germany is ruled by a grand coalition between the center-right CDU/CSU and the center-left SPD. Germany gears up for an election in September with a very doubtful outcome. The cabinet that would have to decide on an Opel bailout is already in campaign mode. Rhetoric is high, everybody vows to save jobs, but nobody seems to be in a mood to come to a decision. The state of Hesse, home of Opel’s main plant in Russelsheim, is ruled by a freshly-installed CDU/FDP coalition. North Rhine-Westphalia, home to Opel’s plant in Bochum, is likewise in CDU/FDP hands. Thuringia, home of Opel’s plant in Eisenach, is in CDU hands. Up for election in August, with a Prime Minister who killed a woman during a freak skiing accident (he received a slap on the wrist in an Austrian court and had to pay €33K for involuntary manslaughter). In a perverse way, the center-left SPD may hope for an Opel debacle before the election. Or not—unemployment may play into the hands of the neo-communists. So again, the easiest option is to talk a lot and do nothing. If all fails, doing nothing can be blamed on a recent EU-decision that bans any unilateral GM/Opel bailout by any EU country: “Hey, we tried, but Brussels stopped us.”

The outcome of the September election could be a pro-business center-right CDU/FDP coalition, or, worst nightmare, a coalition between a weakened SPD, the Greens and the emboldened neo-communists. Paired with an economic crisis, shades of Weimar. Stakes have never been as high, so any hopes of the current coalition cabinet to act can be written off.

Meanwhile, most German manufacturers, notably Volkswagen, are busy filling the demand created by the cash4clunker Abwrackprämie. As of this typing, 379K applications have been filed. Reuters reports that 570K qualifying cars have been sold, which pretty much wipes out the target of 600K cars, and the €1.5 billion in funds earmarked for the program. Automobilwoche [sub] reports that due to the overwhelming demand, the program most likely will be extended until the end of the year. If this continues, German auto sales in 2009 will show solid growth. According to Reuters, Volkswagen is the biggest winner: 27 percent of the filed Abwrackprämien-applications are for new VW cars. Also according to Reuters, Opel benefited nicely from the Abwrackprämien-boomlet. Due to full order books, Opel’s cash may last through the summer. Even more the reason to do nothing.

As long as Opel can muddle through until the elections are over, there is no incentive for anybody to do anything. After September, the issue can be dealt with. “Consolidation” looms, and Opel may very well be the first volume producer to be consolidated. Just like an euthanized Chrysler or a severely curtailed GM would be good for Ford, an omitted Opel would provide extra breathing space for Europe’s (and especially Germany’s) automakers. Yet another reason to do nothing.

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  • Landcrusher Landcrusher on Apr 01, 2009

    Bertel, I was upset about your first sentence, until I read the second. Still, we both know that there are limits on political free speech in Germany, so don't pretend there are not. Your standard of free speech is much more limited than mine. I spend time discussing history online, and that forum has some of it's servers mirrored in Germany. I have actually been edited at the request of the German government! (I wasn't singled out, the subject was the battle in Normandy, and we were not talking politics at all. You do the math). I have traveled much of the globe, Bertel (haven't made it to Africa yet). I have lived in 2 countries outside the US. Nothing I saw changed my idealogy to the left as far as economics or civil rights goes. Quite the opposite. I find your comment about my lack of travel condescending and ignorant. The latter is surprising given the usual quality of your posts. You might want to know that one of my several trips to Germany was for REFORGER. Sorry if it upsets you, but the German system of government was classified as socialist democracy back in the eighties when I went to school, and I suspect it still is. Would you classify Germany, France, and the UK as the same as the US? Lastly, your line about Prozac is absurd and telling. Of course they have freedoms, but that's not the standard. I believe their freedoms are quite precarious, and I am not alone. The safeguards that are under attack here in the US are many of the ones they lack. They are also just the kind of openings another Hitler type needs to take power. Especially in Germany, where talking about his exploits leads to censorship. What happens when all those that remember are gone, but the censorship remains?

  • TireGuy TireGuy on Apr 02, 2009

    Landcrusher, In Germany we have more freedom of speech or demonstration rights as Americans believe they have. Try to find a variety of newspapers in the US which really reflect opinions from left to right - nearly non-existent. Americans get their local newspaper which reports sports and the accident at the corner. I have lived in Georgia, and seeing that newspapers like Atlanta Constitution and Atlanta Journal are from the same company, and reporting bullshit shows where in reality freedom of thought has arrived in the US. Try to burn a US flag in the US - freedom? Check for "political correctness" - freedom? Socialist Germany in the 80s - after Helmut Kohl took the government?

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