The Strife Of Reilly: Berlin Abandons Opel

Bertel Schmitt
by Bertel Schmitt
We’re committed to finding, researching, and recommending the best products. We earn commissions from purchases you make using links in our articles. Learn more here
the strife of reilly berlin abandons opel
Every evening and every morning, and times in-between, Nick Reilly wonders why he exchanged his cushy job as Shanghai-based chief of GM’s international operations with the purgatory of heading Opel in Rüsselsheim. This Tuesday morning, he woke up to more news from hell:An unholy alliance of the center-right German government and the supposedly left-leaning unions told him that his turn-around plan for Opel is rotten, and if GM doesn’t cough up €1.65b, there won’t be a cent in government money.After the EU in Brussels had refused last week to touch the hot potato Opel, and after Opel’s own auditors had betrayed their client, the German government convened its “Bürgschaftsausschuss” (loan guarantee committee) on Monday. It was quickly resolved that the committee doesn’t like Reilly’s plan at all. The assembly found “a number of open questions and concerns” in the concept, reports Germany’s Börsen-Zeitung [sub]. The two biggest questions, according to Germany’s Handelsblatt:Has Opel been in difficulties before the financial crisis hit in 2008? If the answer is “ja,” then this implies a “nein” for government money. The law that governs the “Deutschlandfonds” requires that a company had to be healthy before September 2008, when Lehmann Brothers triggered the money malaise mondiale. If the applicant was already sick, then life support must be denied. Them’s the rules.On the outside chance that Opel is diagnosed free of any pre-existing medical conditions, then there remains the “fundamental question regarding the adequacy of the shareholder contribution,” as the carefully crafted minutes of the loan guarantee committee meeting read.Translation of the stilted language: Opel’s sole shareholder, GM, has to come up with an adequate share of the bail-out money. Adequate being at least half of the total of the €3.3b necessary to keep the lights on at Opel. Message from Berlin to Detroit: ”Send €1.65b, and we’ll talk.”Reilly’s argument that Opel is a European company, and GM’s cash belongs to the American taxpayer, does not get much sympathy in Berlin. “No money, no honey” as the saying goes in Reilly’s former residence in Shanghai.Opel’s unions are in rare agreement with Berlin. “GM hasn’t sold Opel. Therefore, GM needs to invest considerably more into Opel,” said Opel Works Council leader Klaus Franz in Rüsselsheim. He also thinks €1.65b from GM would be about right.In the meantime, Das Autohaus reports that EU competition-commissar Joaquín Almunia, the man with the dislike for hot potatoes, has sent a letter to all European countries with Opel plants, and admonished them to stick to the strict EU rules. In other words: No unilateral help for Opel, unanimous consent or nothing. With the biggest donor nation being tight-fisted, to the applause of the unions, it increasingly looks like nothing.Nick Reilly’s flash-backs of the good life in Shanghai will only increase: “I could be the king of the world’s largest car market. Two million GMs this year in China. The government loves you. Unions? What unions? Why did I leave for this hell-hole Rüsselsheim? Why?”
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.

More by Bertel Schmitt

Join the conversation
2 of 16 comments
  • Robert Schwartz Robert Schwartz on Feb 23, 2010

    €1 = ~$1.35, therefore, €1.65B = ~ $2.2B. Billion dollars should be written G$, where G stands for giga or 10e9 and billion euros should be G€.

  • Pleiter Pleiter on Feb 23, 2010

    Why do the small-car platforms HAVE to be developed in Europe, do these developments make their way to the US ? Is all of this solely about the Cruze ?

  • MaintenanceCosts So there is no Sonata trim without some type of Theta engine.It seems like they've been doing a bit better when attached to a hybrid system, so that's probably the one to get, but they're going to have to go several years without further engine troubles before I'd trust a H/K ICE product again.
  • Lou_BC Full sized sort of autonomous RC's. Cute.
  • Art_Vandelay Autonomous capabilities are being deployed (or planned anyway) in multiple combat vehicles. Should be fun from my perspective
  • Drew8MR Interior is trivial now you can get repro everything in various levels of quality. Getting the top sorted will be a couple grand, but I'd drive it as it. I drove a $1500 67 GTO convertible for 20 years, not every old car needs to be like new.
  • John Not everyone pays that much for power. Mine is 10 cents per kw…..