Wild Ass Rumor of the Day: GM to Put Opel Into C11

Robert Farago
by Robert Farago

The Wall Street Journal reports that GM is developing a plan B, should the European Union decide that the German government subsidies upon which the Opel deal depends are a violation of some rule or another. “[EU competition commissioner Neelie] Kroes pointed to ‘significant indications’ that Germany had made €4.5 billion ($6.72 billion) in state aid for Opel contingent on Magna winning the bid, therefore violating EU state aid and market rules.” GM now has a window of opportunity to reconsider the whole schmeer—as does the German government, Magna and their Russian sponsors. GM’s backup plan? Keep control of Opel and implement “deeper restructuring actions than Magna is planning . . . GM would fund the restructuring, which includes far more drastic headcount reductions, by soliciting government support or putting Opel into insolvency.” Which should be popular with about-to-strike Opel workers. Oh, and which government was that? Our government? No, of course not. Still, he/she who owns the gold . . .

If GM were to consider another plan for Opel, German Chancellor Angela Merkel could then find herself in the awkward position of financing an outcome that slashed far more Opel jobs in Germany and shuttered some of its plants. Ms. Merkel and her conservative allies are eager to preserve the Magna deal ahead of critical regional elections next May in North Rhine-Westphalia.

Magna has said that roughly 4,000 of the 10,500 Opel jobs it would have to cut across Europe would be in Germany, but it has indicated it wouldn’t shut any plants there. Government officials in the U.K., Spain and Belgium have raised objections, arguing German jobs would be protected at the expense of those in their countries.

See what happens when jobs are your number one product, rather than profitable vehicles? And this will change when? How? Where? Why? With what? Answers on a postcard, please.

Robert Farago
Robert Farago

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  • Gardiner Westbound Gardiner Westbound on Oct 19, 2009

    Doubt if German Chancellor Merkel much cares now that the election is over and she won.

  • Daanii2 Daanii2 on Oct 19, 2009

    Carmakers are turning into tar babies for governments around the world. The government touches the tar baby once and then it cannot let it go. The tar baby causes more and more of a mess. We all suffer. In the case of Opel, that will be Magna's tar baby too. If I were Frank Stronach, I'd wake up and realize that buying Opel will take more from Magna than it will give.

  • James Hendricks The depreciation on the Turbo S is going to be epic!
  • VoGhost Key phrase: "The EV market has grown." Yup, EV sales are up yet again, contrary to what nearly every article on the topic has been claiming. It's almost as if the press gets 30% of ad revenues from oil companies and legacy ICE OEMs.
  • Leonard Ostrander Daniel J, you are making the assertion. It's up to you to produce the evidence.
  • VoGhost I remember all those years when the brilliant TTAC commenters told me over and over how easy it was for legacy automakers to switch to making EVs, and that Tesla was due to be crushed by them in just a few months.
  • D "smaller vehicles" - sorry, that's way too much common sense! Americans won't go along because clever marketing convinced us our egos need big@ss trucks, which give auto manufacturers the profit margin they want, and everybody feels vulnerable now unless they too have a huge vehicle. Lower speed limits could help, but no politician wants to push that losing policy. We'll just go on building more lanes and driving faster and faster behind our vehicle's tinted privacy glass. Visions of Slim Pickens riding a big black jacked up truck out of a B-52.