GM and Opel: What Part of "Nein" Don't You Understand?

Bertel Schmitt
by Bertel Schmitt

The board of GM convened on Friday to finally decide Opel’s fate. The board did as expected: It did nothing. They left everybody hanging. The board decided to not decide anything.

According to Reuters, the GM board desperately needs critical information from the German government. To wit: What state financing would be available if GM would sell Opel to their darling RHJ International, and not to Magna, which is favored by Germany.

Excuse us?

Do we have a serious case of highly contagious ADD, which has befallen the complete GM board? We thought it had been made perfectly clear:

If the buyer is Magna, Berlin will shell out €4.5B—for starters. Berlin will do this on its own and they would even abstain from begging other Opel countries for money in the interest of getting the show on the road.

If the buyer is RHJ, RHJ will get nada, zilch, zip, nichts. Verstehst?

Apparently not.

Today, Germany’s Economy Minister Karl-Theodor zu Guttenberg said to the Hamburger Abendblatt: “I regret that the supervisory board was unable to come to a decision.” But there is “still room for an agreement.”

When politicians say that, that room usually gets desperately small.

As far as additional information goes, the ADD-afflicted board would be well advised not to ask again. “The federal government and the states have provided GM with all the information which they believe is needed for a decision,” an exasperated Guttenberg told the newspaper.

Guttenberg hopes that GM makes “a smart decision.”

Why do we doubt they will?

Bertel Schmitt
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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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4 of 13 comments
  • Hal Hal on Aug 23, 2009

    Once Opel is sold to Magna/Sberbank they will never see it or the IP again. They will have nothing to sell in Western European markets other than Chevy badged Daewoos. They are sawing off a limb and just won't be competitive in Europe. The German govt. is intervening to protect German jobs and the industrial base, they don't need to "make nicey nicey with the soviets for Natural Gas" the Russians don't have another market for their gas.

  • Vega Vega on Aug 24, 2009

    @Bubba Gump: By the way, the "Soviet" thing ended 20 years ago. Also, and this may come as a shock to you, the Berlin wall has come down! Europe is the only market that buys Russian gas for world market prices, so Russians are definitely not interested in killing the golden goose... No appeasement needed.

  • Tricky Dicky Tricky Dicky on Aug 24, 2009

    Thanks for providing the needed "Soviet" clarification Vega. Move on people. Torn - isn't there a 4th Scenario which we haven't properly understood yet. Although Opel was shifted out of old-GM into a trust (made up of GM Europe and German government trustees), the company is still up for sale. Germany wants Magna (scenario 1), new-GM want RHJ and a nice buy-back clause (scenario 2), neither are willing to compromise. Scenario 3 is just let the bridging-loan money for Opel run out to they go into bankruptcy (scenario 3). So what about the possibility that Adam Opel is moved out of the trust and back into full control by new-GM? That GM pick up the operational funding again and Opel remains an integral part of the bright, shiny new world that is "New (and improved) GM"?! I know the German workers really don't want to work for the Americans again and have lobbied hard to ensure that the Federal States support this position. But given an unwillingness to compromise on 1 and 2, and the fact that EVERYBODY loses under scenario 3, is this 4th option so unlikely/ legally impractical? Are there any informed opinions about this? Thanks.

  • Tricky Dicky Tricky Dicky on Aug 24, 2009

    Maybe there's a 5th option after all. Allow Opel to go bankrupt then sell it as a sum-of-the-parts arrangement to raise cash. Would proceeds end up in new GM coffers? Would GM take the risk of their IP effectively being up for auction to the highest bidder? I doubt it.