GM Makes Cash-Infusion To Opel. Kindof

Bertel Schmitt
by Bertel Schmitt

GM sent Opel “an additional $930m in temporary aid until more permanent financing can be found” (good luck with that,) GM disclosed in a filing with the SEC. The total financing GM has provided to Opel now stands at $1.83 b, writes the DetN. It’s not that GM sent the money out of the kindness of their hearts.

The $930m million includes “the acceleration of certain payments owed under engineering services agreements,” the filing says. In other words: GM finally pays some outstanding bills. For more than a year, it had been mentioned off and on that GM owes Opel anywhere between €1b and €2b for services rendered. That would be $1.43b to $2.86b.

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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  • Ott Ott on Jan 15, 2010

    That looks just like my basement.

  • Daanii2 Daanii2 on Jan 15, 2010

    Interesting news. After reading the title, I was looking through the posting for someone named "Kindof." Now I see it should be "Kind of." That makes more sense.

  • Lorenzo Lorenzo on Jan 15, 2010

    The key phrase seems to be payments under "engineering services agreements". GM really doesn't need Opel, the car maker, it needs the Opel engineering center and its IP that underlays so many platforms. Once the payments are current, GM can separate the engineering center from Opel and own the IP. Then they can threaten layoffs at Opel plants unless governments kick in cash to keep them afloat. At least, that's what I would do. Is there any Euro law that would keep GM from prying the jewels out of their settings and leaving the scrap settings behind?

  • Tparkit Tparkit on Jan 15, 2010

    To get rid of Opel, GM needs to put cash on the hood. That's what this transfer is. No one will take this pile of crap off GM's hands until GM (i.e. US taxpayers) pony up to make it worth the acquirer's while. There are many forms of doing this. Some examples (not mutually exclusive): - clean up the Opel balance sheet by paying off liabilities. - close Opel plants, and have GM/taxpayers absorb the severence and other costs. - have GM maintain an equity stake, which in reality will function as a pipeline for funneling US taxpayer money to the buyers under the guise of strategically supporting GM's investment in dazzling auto technology. The key to understanding the transaction (and the failure to reach a deal so far) is to understand that no buyer will put up a dime. Buyers have to be bribed to solve Washington's political problem, and they're waiting for the right package before they'll help the Democrats escape the stink of failure. When they buyers get their number, they'll play their part in this charade to make the American citizenry think an arms-length, free-market transaction has taken place. When the deal happens, the European governments will chip in token sums in order to grab some credit for saving jobs in Europe.

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