Opel: The Bridge Is Gone

Bertel Schmitt
by Bertel Schmitt

GM is no longer in hock with Germany. They paid back all of the €1.5b bridge loan Opel had received from Berlin to keep it afloat until it was taken over by Magna and Sberbank. As we all know, this didn’t happen. Berlin wanted its money back, and got it.

“I can tell you that the last funds for Opel have been paid back by General Motors,” said German Chancellor Angela Merkel. “I expect at least a thank you letter from General Motors in a few years.” There isn’t much love lost between GM and Berlin these days.

In the meantime, the liar’s poker surrounding Opel continues. There was a meeting in Brussels to which all of Europe’s Economy Ministers were invited. Most sent their deputies. The meeting concluded with everybody swearing not to do anything in aid to Opel without consulting the others. Such an oath of allegiance had been made before, and broken.

GM’s Nick Reilly had traveled to Brussels to meet with the officials, including EU Industry Commissioner Guenter Verheugen, and EU Competition Commissioner Neelie Kroes. Reuters reports that after the meeting, Verheugen said that “General Motors made one point very clear, 100 percent clear, the restructuring plan could only be achieved when European member states with Opel plants give some financial help.” Ten days ago, GM’s Chairman Ed Whitacre had said that “we will pay for it ourselves.”

As far as Germany is concerned, GM and Opel are on their own. With the bridge loan paid back, the Opel Trust will be disbanded. Germany’s new Economy Minister Rainer Brüderle is opposed to any help. Yesterday, he said on national TV: “Like any German company, Opel can hand in an application for aid. We will review the application as in duty bound. Opel is not entitled to aid.” Brüderle said that keeping jobs is a worthwhile goal. “However, the German taxpayer is no sugar daddy.”

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

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  • GarbageMotorsCo. GarbageMotorsCo. on Nov 25, 2009

    "Opel is not entitled to aid.” Brüderle said that keeping jobs is a worthwhile goal. “However, the German taxpayer is no sugar daddy.” The same should apply to those of us in the States

  • Tricky Dicky Tricky Dicky on Nov 26, 2009

    Reading the comments above, I can't help but think you guys weren't reading this story from the beginning. This is not a victory for the German government in any way. They were falling over themselves before the Sept. election to give money to Magna so that Opel could be saved from ["the horrendous burden of"] American (mis)management control. When GM finally realised they need a compact-car engineering strategy and might actually need Opel R&D in future, they effectively 'flipped the bird' at the German gov't. In that one move, GM managed to sting the German national pride, allowing the post-election government to take a ferocious line against GM. If anybody has saved the day, it has been the EU Competition Commissioner (a Dutch woman by the name of Neelie Kroes). She gave the German gov't a slap on the wrist for tieing state aid to German job protection and allowed GM to do a U-turn. And now she has created the conditions that no EU gov't is allowed to speak to GM about financial aid, UNTIL GM has revealed its hand about what jobs it is going to cut, breaking the link between aid and job protection. The headlines should read, "EU fairly manages national interests AND global corporations, for benefit of European citizens".

    • Tparkit Tparkit on Nov 26, 2009

      Dicky, you're being suckered by the orchestrated action on the stage. The EU ruling is part of the smokescreen European governments are hiding behind so that they can claim their hands are tied. This obfuscation helps them defuse the issue so it can not be used against them effectively by their domestic political opponents. Their primary goal, however, is to leave GM (i.e. the US taxpayers) holding the bag and footing the bill -- without it looking like that's what the Europeans are doing. It's hardball, pure and simple.

  • Lichtronamo Watch as the non-us based automakers shift more production to Mexico in the future.
  • 28-Cars-Later " Electrek&nbsp;recently dug around in Tesla’s online parts catalog and found that the windshield costs a whopping $1,900 to replace.To be fair, that’s around what a Mercedes S-Class or Rivian windshield costs, but the Tesla’s glass is unique because of its shape. It’s also worth noting that most insurance plans have glass replacement options that can make the repair a low- or zero-cost issue.&nbsp;"Now I understand why my insurance is so high despite no claims for years and about 7,500 annual miles between three cars.
  • AMcA My theory is that that when the Big 3 gave away the store to the UAW in the last contract, there was a side deal in which the UAW promised to go after the non-organized transplant plants. Even the UAW understands that if the wage differential gets too high it's gonna kill the golden goose.
  • MKizzy Why else does range matter? Because in the EV advocate's dream scenario of a post-ICE future, the average multi-car household will find itself with more EVs in their garages and driveways than places to plug them in or the capacity to charge then all at once without significant electrical upgrades. Unless each vehicle has enough range to allow for multiple days without plugging in, fighting over charging access in multi-EV households will be right up there with finances for causes of domestic strife.
  • 28-Cars-Later WSJ blurb in Think or Swim:Workers at Volkswagen's Tennessee factory voted to join the United Auto Workers, marking a historic win for the 89- year-old union that is seeking to expand where it has struggled before, with foreign-owned factories in the South.The vote is a breakthrough for the UAW, whose membership has shrunk by about three-quarters since the 1970s, to less than 400,000 workers last year.UAW leaders have hitched their growth ambitions to organizing nonunion auto factories, many of which are in southern states where the Detroit-based labor group has failed several times and antiunion sentiment abounds."People are ready for change," said Kelcey Smith, 48, who has worked in the VW plant's paint shop for about a year, after leaving his job at an Amazon.com warehouse in town. "We look forward to making history and bringing change throughout the entire South."&nbsp;&nbsp;&nbsp;...Start the clock on a Chattanooga shutdown.