High Stakes Opel Poker: GM Kicks In 1.9b, Wants To See 1.8b In Aid

Bertel Schmitt
by Bertel Schmitt
GM throws in the towel. And throws a lot of (your, well, our) money after Opel. GM will invest a total of €1.9b into the German patient, says Das Handelsblatt today after talking to Bob Lutz. Nick Reilly confirmed the message today, and said the money can flow as paid in capital and loans from the mother-ship. It finally dawned on GM that European governments are just stringing them along until Opel runs out of money – again.Which could happen rather sooner than later. Last Friday, Germany’s Autohaus reported that Opel might run out of cash this summer.GM wanted €2.7b from the European governments, especially from Germany. Germany balked. They never said openly “nein.” But they kicked the ball back and forth between Brussels and Berlin, in what Das Handelsblatt called “a brazen double-cross.” TTAC said various times that GM should not count on Europe’s governments of pulling their (chest)nuts out of the fire.Don’t think we are done yet. GM had another epiphany. They finally realized what many had said before: €2.7b are not enough to survive. €3.7b sound about right , says Opel now. Which means that GM pays €1.9b, and the European governments pay (or secure) €1.8b. At least that’s how GM sees it.GM hopes those double-crossing Germans were serious when they said that they might consider kicking in their fair share if GM kicks in the other half. Except that that half now has grown a bit. Let’s watch the next reactions out of Berlin. There seems to be a serious game of high stakes poker going on.
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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  • Tparkit Tparkit on Mar 02, 2010

    Anyone who ever thought the Opel "negotiations" were about anything other than securing US taxpayer cash ought to be starting to have their own epiphany right about now. For future analysis, a key phrase to keep in mind is "paid in capital and loans from the mother-ship". The cash will flow into Opel by many conduits, and this multiplicity will be aimed at hiding the full extent of the money Washington/Government Motors will waste keeping Opel afloat past as many US elections as possible. Don't for a minute believe the figure of €1.9b -- the true cost will be much higher. If you want a conceptual yardstick for this sham, think Fannie & Freddie.

  • Kwik_Shift Hyunkia'sis doing what they do best...subverting expectations of quality.
  • MaintenanceCosts People who don't use the parking brake when they walk away from the car deserve to have the car roll into a river.
  • 3-On-The-Tree I’m sure they are good vehicles but you can’t base that on who is buying them. Land Rovers, Bentley’ are bought by Robin Leaches’s “The Rich and Famous” but they have terrible reliability.
  • SCE to AUX The fix sounds like a bandaid. Kia's not going to address the defective shaft assemblies because it's hard and expensive - not cool.
  • Analoggrotto I am sick and tired of every little Hyundai Kia Genesis flaw being blown out of proportion. Why doesn't TTAC talk about the Tundra iForce Max problems, Toyota V35A engine problems or the Lexus 500H Hybrid problems? Here's why: education. Most of America is illiterate, as are the people who bash Hyundai Kia Genesis. Surveys conducted by credible sources have observed a high concentration of Hyundai Kia Genesis models at elite ivy league universities, you know those places where students earn degrees which earn more than $100K per year? Get with the program TTAC.
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