GM Needs To Invest "Lots Of Money" In Opel. Their Own

by Bertel Schmitt

Published: December 27th, 2009

gm needs to invest lots of money in opel their own

Russia’s Sberbank isn’t the only party that is unhappy with GM and wants to see money.Germany’s government wants GM to put “a lot of money” on the table before any further discussions about European state aid for Opel would be entertained, reports Germany’s Handelsblatt.Note that the harsh comments are coming from Roland Koch, Premier of Opel’s home state Hesse. Previously, Koch had been a vociferous proponent of state support for Opel. Not more.According to Koch, any further discussions about state aid to Opel are, at this point in time, “completely baseless. The circumstances have changed. GM is a solvent company.” Koch demands from GM a considerable contribution to safeguard the future of Opel. “Those who want to own Opel 100 percent have to step up to the plate when it comes to investments and financing.”The Premier of Hesse, a state which has no other auto manufacturers (except for Volkswagen’s parts distribution center in Kassel,) is amazingly sympathetic with the plight of other car makers. Koch concedes that Germany’s Abwrackprämie and other European scrapping schemes had a pull-forward effect, which will leave a gap in 2010. Closing this gap “will be easier for more export oriented companies than for Opel, which is focused on the European market,” Koch said. Translation: Opel won’t make it.GM should invest “a lot of money,” and present a solid business plan. “Then we can talk.” Without that, any further debate about federal or state aid for Opel is for naught.After German Economics Minister Rainer Brüderle had said that EU governments won’t exchange financial aid for jobs at Opel, talk about EU government money has died down. Message from Europe to GM: You’re on your own.Following Brüderle’s comments, Nick Reilly said: “There is a belief out there that GM has sufficient money in the US that it can spend in Europe. That is not the case.” Assuming that both Brüderle and Reilly were telling the truth (we know, we know,) then Opel is SOL.

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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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Psarhjinian on Dec 27, 2009
Despite the rhetoric, every government that GM has threatened with a shutdown has caved in and come up with the cash. Sadly, the Germans will fall in line. Not necessarily. Europe doesn't need the relatively small slice of the market that GM represents; not the way that Korea, Canada or the US does. The failure of Opel/Vauxhall would just embolden and enrich existing European players looking for a way to grow. This is why VW was so vociferously opposed to the Magna deal: it would have kept Opel viable in the Europe, where RHJ or GM's own plans would have seen them, likely, wound down or gutted. VW stands to gain the most from a failure of GM Europe, and Europe wouldn't particularly mind seeing their native marques pick up marketshare, rather than GM cranking out EuDM models off of Daewoo or SAIC production lines, even if it means a few thousand jobs lost in the interregunum. This is all very different from Korea or North America, where GM's failing would hurt it's competition and the economy as a whole.

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- Bertel Schmitt on Dec 28, 2009
  
  The failure of Opel/Vauxhall would just embolden and enrich existing European players looking for a way to grow. Exactly. What the more myopic commenters overlook is that the European market is set up for a big contraction in 2010 as cash-for-clunkers wears off. Jobs will be lost because of this. It becomes a triage matter. Governments have to choose whether they support fairly healthy indigenous car companies, or a dying, yet arrogant American company.
  As for John Smith, it appears as if he is being dispatched when GM wants to see a deal go down the drain. A search for him sees him pop up in connection with Saab. His last grand idea seems to be to put the Saab name up for sale. BAIC might be interested. A soon-to-be-unemployed Saab engineer said: "This is as if a bad guy watched someone die and then snatched his ID card to sell it."
  
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Buickman on Dec 28, 2009

only one interaction with Docherty. she was pleasant and courteous. as to her ability and past accomplishments, I cannot say much except that there are no glaring successes. I disagree with her continuation of Red Toe Tag sales and crossword puzzles of incentives, and her time at Pontiac was certainly less than impressive to say the least. still the woman was respectful and professional towards me. also must add she really doesn't know what a Buick is supposed to be, but perhaps she will learn...quickly I hope. Smith on the other hand is flat out rude, and in my opinion a complete and absolute jerk. surprised Whitacre hasn't swung the ax on him as yet.

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