Opel Rescue Delayed

Edward Niedermeyer
by Edward Niedermeyer

GM was supposed to have a restructuring plan for Opel in place by the end of December, but it’s looking like that deadline is DOA. In a blog post at GM Europe’s “ Driving Conversations” blog, GME supremo Nick Reilly explains:

While it is indeed exciting to see that things are coming together, bear in mind this is going to be one of the largest, most complex industrial reorganisations in European manufacturing in years. It will affect thousands of people and their families; impact plants and other stakeholders.

We are determined to do this right. We must do this right. Although we had hoped to have the new business model finalised in December, it appears that more work needs to be done and further consultations will not be rushed.

I said earlier that we would have a plan in place by year-end. Now it looks like an announcement may slip into January. This is not a broken promise. It is a pledge to do something right.


More likely, the problem is cash-related. GM has thus far only offered to pay 20 percent of the cost of restructuring Opel, or about $1b of the estimated $5b price tag. The rest would come from European governments, who are not eager to see unemployment rise if Opel goes under. At least that’s the theory.

And though in some respects that seems to be a fairly safe bet (according to Sergio Marchionne, no OEM auto factory has been closed in Europe since before World War II), GM is incredibly unpopular in Europe. Speaking at a conference in Brussels, Justus Haucap, the chair of Germany’s Monopolkommission said that aid for Opel would distort competition, possibly putting automakers like VW at a disadvantage. This, despite the German government’s previous willingness to violate EU rules to fund the sale of Opel to Magna. According to Haucap, Opel’s problems started “long before the financial crisis” as the automaker’s sales have fallen by 100,000 units since 2005.

According to the WSJ, Haucap believes “It is also unclear why Opel should have no other source of funding given that it is 60% owned by the U.S. government,” and that “he is optimistic that the new German government will have a more competition-based approach to helping Opel.” In plain English: nobody wants to give GM money to keep Opel.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Comments
Join the conversation
2 of 13 comments
  • Rusted Source Rusted Source on Dec 10, 2009
    This is not a broken promise. It is a pledge to do something right. Ain't that a peach. I should use that line the next time my wife complains that our house renovations are still not done.
  • Tricky Dicky Tricky Dicky on Dec 11, 2009

    I think the Marchionne quote was referring to German car factories not closing. Plenty of plants closed in the UK for example, Renault shut up shop in Brussels about 10 years ago for a continental European example.

  • Jor65756038 At least I will never buy a SUV or a crossover for the simple reason that I don´t like them. I still buy sedans (and my family too) and will continue doing so.On the other hand, a vehicle with a higher gravity center, a design that creates more resistance to the wind an makes it more polluting, more consuming, less stable and offers absolutely no advantage over a sedan in a planet with climate change problems... Where is the advantage in that? A change is supposed to make things better. Not to make them worse.
  • Bob65688581 We bought zillions of German cars, despite knowing about WWII slave labor. Refusing to buy something for ideological reasons is foolish.Both the US and the EU have imposed tariffs, so the playing field is level. I'll buy the best price/quality, regardless of nationality.Another interesting question would be "Would you buy one of the many new European moderate-price EVs?" but of course they aren't sold here.Third interesting question: "Why won't Stellantis sell its best products in America?"
  • Freshblather No. Worried there will be malicious executable code built into the cars motherboard that could disable the Chinese cars in the event of hostilities between the west and China.
  • Bd2 Absolutely not - do not want to support a fascist, totalitarian regime.
  • SCE to AUX The original Capri was beautiful. The abomination from the 90s was no Capri, and neither is this.It looks good, but too similar to a Polestar. And what's with the whacked price?
Next