German Minister: Opel May Still Go Bankrupt
Fiat, RHJ International and Magna have all submitted bids for GM’s European unit, Opel. In an interview published today [reported by The New York Times], German economy minister Karl-Theodor zu Guttenberg reserved the right to reject all three suitors, sending Opel into bachelor’s bankruptcy. “We must first have a high degree of certainty that the significant tax money we will have to provide is not lost,” KTzG pronounced. Roger that. All three offers depend on German financial backing; without which NONE of them will go forward. After those glad tidings hit the net, KTzG went into damage control mode. Speaking to journalists in Berlin, Mr. Guttenberg’s spokesman “clarified” his position: “we want to avoid bankruptcy, but bankruptcy has to be an option. Apparently, an “orderly insolvency” would “not be the end of the company.” Who’s the oxymoron now?
More by Robert Farago
Comments
Join the conversation
As he is opposed in his own party by Roland Koch and Jürgen Rüttgers and the whole SPD (the other party in the Coalition) I don't give him much chances of having a choice to let Opel go into insolvency. Over 50% of all Germans do have the opinion that Opel has to be saved and the elections are coming fast. So basically he is only trying to get better bids from Fiat and Magna. However I am not very happy with Magna/the Russians as future owner of Opel. I agree with Marchionne: Magna has no experience whatsoever in running a bigger car maker.
Perhaps Minister Guttenberg is looking westward across the Atlantic in his realization that some alternatives are worse than ordinary bankruptcy.
The only way taxpayer money will not be "lost" is a total disconnect from GM and Vauxhall. Magna is the deal that perhaps could work, especially with favorable access to the Russian market.
It is comforting that the minister is not following suit in throwing money out of the window. The social democrats have already decided that they are willing to go for the Magna deal, whithout any detailed check and any comfort that the money will not be lost. Election Time .... While many Germans want Opel to be rescued, they would go wild if Germany would rescue Opel in such way that a few billions would in the end show up at GM (well: go down the sink over there ....). KTZG will have to make sure that the government will give guarantees only if it is ensured that the ties are cut, and that the money will make sure that Opel will become independent and will not draw on the guarantees.