Sberbank To GM: You Leave, You Pay

Bertel Schmitt
by Bertel Schmitt

These days, no Christmas cheer is complete without a little Opel jeer. Russia’s Sberbank has demanded compensation from GM for reneging on the Opel deal, Sberbank CEO German Gref said in an interview on Russia’s Vesti television channel. Groveled a grouchy Gref:

“We have incurred significant costs. We have estimated all expenses and handed over a demand for voluntary compensation to the company. If the demand is not met, we will press for compensation by judicial means.”

Sberbank’s CEO complained that some 9,000 pages of contract had been drawn up over 9 months negotiations with GM, only for GM to withdraw two days before its planned signing, without providing any “essential explanations,” reports the Russian news agency Novosti.

Sberbank is said to be close to the Russian government, and if they file in Russia, they might find a sympathetic court. It wouldn’t be the first time that GM had to pay after a deal went kaput. Fiat received $2b of go-away money from GM after their romance soured.

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

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6 of 24 comments
  • Blowfish Blowfish on Dec 26, 2009

    Just got to be shmarter next time, u tell him u owe nothing should the deal went South. But dealing with the Ruskies it could be a different ball game. And they're even more upset as the Middle Kingdom bagged the Volvo, perhaps the SAAB next. Putin got Zilch. Caveat Emptor

  • Mark out West Mark out West on Dec 26, 2009

    This is bogus. GM, like all U.S. companies, issues a Letter of Intent prior to entering into negotiations. I seriously doubt they had an expense compensation clause in there for a Russian bank. Standard boilerplate first-year Contracts in law school.

    • Charly Charly on Dec 27, 2009

      Letter of Intent isn't worth much if there was never an intent to sale. Something which is likely in the case of GM

  • MikeInCanada MikeInCanada on Dec 26, 2009

    From a western legal perspective this probably wouldn't make it too far in court. However, this is Russia and there are a completely different set of rules in play. GM knows (or should know) that they are at risk to cough up some cash or some small claims judge in Chelyabinsk is going to slap a lien on the local Chevy plant and that will be that!

    • Pig_Iron Pig_Iron on Dec 27, 2009

      In Putinist Russia, you don't back out of contract; contract backs out of you.

  • Camoeto Camoeto on Dec 27, 2009

    Conventional wisdom would tell you that GM shouldn't be obligated to pay anything. However, in Russia's legal system this is replaced by the "Golden Rule" - whoever can offer up the biggest bribe wins. In this case it looks like the latter wouldn't apply either since Sberbank is owned by the Russian government, so GM will pay no matter what. Even if there is a political solution, and GM doesn't end up paying, the Russians will find a way to benefit from this. GM was the best selling foreign brand in Russia for the last couple of years and there is too much at stake for them to piss off the Russian government.