Editorial: Opel Watch: Henderson: "We Are a Victim of Coicumstance!" Fiat: "Andiamo!" Magna: "Jetzt Reicht's!"

Bertel Schmitt
by Bertel Schmitt

Today, Berlin will re-attempt to save Opel after the disastrous Wednesday night / Thursday morning confab. From most accounts, that meeting was a remake of The Three Stooges, with the actors sent by central casting in Washington and Detroit. Berlin is still fuming about the “impertinence” (finance Minister Peer Steinbrück) of the junior Treasury staffer who demanded an extra $415 million more in short-term cash, above the bridge financing of $2.1 billion Berlin had been ready to sign that night. They also are still grumpy about being lied to, or handed “information with a short half-life” as the finance minister put it ever so politely.

Still smarting from the public flogging the German ministers administered after the meeting, GM is in heavy backpedaling mode. It’s all a big misunderstanding, GM CEO Fritz Henderson told Bloomberg. Fritz should have gotten his derriere over to Berlin in the first place, preferably with PTFOA member Ron Bloom alongside.

When the Germans found out during Wednesday night that the Treasury staffer was absolutely useless, they established a quick videoconference with Bloom, desperate for someone who makes at least a bit of sense. To be sure, Germany’s SecState Steinmeier called his colleague Hillary Clinton for help. For what it’s worth, Hillary offered her “utmost support.”

Back to Henderson: Fritz says GM didn’t ask for additional funding for its Opel unit from the German government. Das ist ein Mißverständnis. GM’s request for a $2.1 billion bridge loan remains unchanged. GM just needs the money a bit faster: $630 million upfront. The German government had thought the immediate needs were $140 million, Fritz explained. “Any confusion that was caused by this we take responsibility for,” Henderson says with as much contrition he can muster.

That will go down just swimmingly in Berlin. They were already confused that night in Berlin, because numbers kept changing; some doubted whether the US delegation knew the difference between dollars and euros. Now, it’s $630 million instead of the $415 million that made the Germans hurl carefully crafted invectives westward ho. Everybody: On your knees and pray that nobody reads Bloomberg in Berlin.

Henderson tells the sob story that all GM is doing is try to “protect its European operations, including Germany-based Opel, before a US government-imposed June 1 deadline to restructure or file for bankruptcy.” We’ll see tonight how much sympathy he will get for that one.

One participant of the Wednesday meeting already picked up his ball and went home, to Torino. Fiat’s Sergio Marchionne said he will not make any more concessions, and he will not take part in the second round of meetings tonight, and he did not get full disclosure of the Opel books, and he’s not willing to take on any additional risks. Arrivederla, signora e signori! The other part of the truth is that someone on the inside had leaked that “Fiat is out,” as Der Spiegel reports.

Magna is just about to get up and leave also: Since 6 a.m. (local), Magna has been negotiating with Forster et al. in the Berlin Hotel Adlon, right across from the Brandenburger Tor. Forster must not have talked to the contrite Henderson. The meeting isn’t going anywhere.

Not having learned anything from Wednesday night, GM “is constantly making new demands” BILD Zeitung was told. Yesterday, Magna was ready to help with the $415 million bone of contention. Now they are mad as hell, and are close to saying “Jetzt reicht’s” (Enough is enough.). “They are ready to get up and leave,” BILD reports.

With the negotiations in increasing disarray, a bankruptcy of Opel gets ever more likely. The Frankfurter Allgemeine Zeitung reports that Opel has hired insolvency expert Jobst Wellensiek, along with the Clifford Chance lawfirm, which is working on a bankruptcy package to file with the court. Even chancellor Angela Merkel, who so far had taken the presidential high road, now doesn’t want to rule out an Opel bankruptcy, reports Der Spiegel.

It may be the cheaper solution all around. Germany’s economy department calculated that a shuttered Opel would cost the government €1.1 billion—assuming that all 25,000 workers will remain unemployed and find no new jobs (a nuclear winter scenario). Total government costs for an alive Opel: €4.5 billion under the Magna model, €6 billion if Fiat gets it. Germany’s other car manufacturers would be glad to take up the slack.

GM and Magna have until 2p.m. GMT to agree or disagree on a deal. If they agree, the German government will probably accept the deal without much fuss, says the FAZ. If there’s no deal, then the meeting tonight will be short. The bankruptcy of Opel shall be blamed on the ugly Americans, and Germany will go back to more important things. Who will win the fall elections?

Don’t touch that dial . . .

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2 of 19 comments
  • Willman Willman on May 29, 2009

    Kind of sad but not surprising GM seems to be trying the same crap on Berlin they're doing here. "Wait; did we say 10 Billion? -Well, that was before we found out, just now, that we'll need another 190 Billion. And probably after that, but not really sure, maybe; -another 50 Billion; and a 5-dollar foot long from Subway; everything on it." --Can't we just have Jason Bourne assasinate Henderson, the unnamed staffer & the other offending parties in room 645 of the Hotel Brecker?

  • Shaker Shaker on May 30, 2009

    Prosecutor: "...and drop the vernacular." Curley: "That's not a vernacular, that's a DOYBEE!". Oh, thank you!

  • Teddyc73 A resounding NO. This has "Democrat" "Socialism" "liberalism" "Progressivism" and "Communism" written all over it.
  • Jeffrey An all electric entry level vehicle is needed and as a second car I'm interested. Though I will wait for it to be manufactured in the states with US components eligible for the EV credit.
  • Bob65688581 Small by American standards, this car is just right for Europe, and probably China, although I don't really know, there. Upscale small cars don't exist in the US because Americans associate size and luxury, so it will have a tough time in the States... but again Europe is used to such cars. Audi has been making "small, upscale" since forever. As usual, Americans will miss an opportunity. I'll buy one, though!Contrary to your text, the EX30 has nothing whatsoever to do with the XC40 or C40, being built on a dedicated chassis.
  • Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
  • ToolGuy Seems pretty reasonable to me. (Sorry)