EU Calls Opel Summit
For Monday, November 23, EU Economy Commissar Günther Verheugen invited all EU Economy Ministers to come to Brussel to attend an Opel summit. GME’s new chief Nick Reilly will also attend, reports Unternehmer.de. The idea behind the meeting is anti-competitive: “The Commission is strictly against any bidding war with subsidies,” Verheugen said. Any government help for GM and Opel will be subject to intensive scrutiny from Brussels. Verheugen doesn’t want to rule out government help, as long as EU rules are not broken.
Don’t read too much into this meeting.
Verheugen is the Economy Commissar, and he is a member of the German Social Democrats – they were and are for state subsidies. The Commissar that torpedoed the Magna deal is Neelie Kroes, the European Commissar for Competition. She is a member of the pro-business Dutch Volkspartij voor Vrijheid en Democratie. They have no jobs to protect. Neelie likes subsidies like the devil appreciates holy water. Also, these summits happened before. On a previous one, it had been agreed that nobody in Europe would support GM or Opel without consulting all other EU countries. The minute it was agreed, it was forgotten.
Despite tall claims by Ed Whitacre, GM needs to find money badly, otherwise their Opel plans will go belly-up. According to Reuters, GM found €2b in its piggy-bank. That’s not even enough to cover the severance pay necessary if they want to let 10,000 workers go. To reorganize Opel costs €3.3b, figures GM. Who will come up with the rest of the money is anybody’s guess. That €3.3 are enough is being widely discounted. Twice the amount should be about right.
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GM actually said it would take 3B Euros. The German Gov't said 3.3B Euros. Just trying to help getting those facts straight.