Opel Soap, Day 2.5: China's BAIC Wants Opel, Again

China’s BAIC, the car company that is for all intents and purposes owned by the city of Beijing, is after Opel. That’s what Germany’s Welt, a paper usually well connected with the current German government, heard “from sources inside the company.”

BAIC is an old fan of Made-in-Germany. BAIC had the Chrysler joint venture, and met Mercedes during the Daimler-Chrysler era. Chrysler left, BAIC kept Benz and happily builds E-Class and C-Class Mercedes in Beijing. They also build Hyundais.

When Opel was up for sale in 2009, BAIC put in a bid. It was the best looking of all. They offered to close only Antwerp, to not touch the other plants in Europe, and to open the huge Chinese market for Opel. However, they were not taken seriously. Also, the German government already had its darling: Magna. Then, GM pulled out and kept Opel. BAIC got a piece of Opel nonetheless: They bought the Saab tooling, and from what I’m hearing, they like it.

Now, BAIC is at it again, and is bidding for a prettier Opel. Antwerp is closed. Bochum is dropping a few battalions of workers with golden parachutes. No government support would be needed, at least not from the German government.

Die Welt heard of a rift in the board on GM. The “hawks” want to get rid of Opel, pretty much abandon Old Europe and focus instead on Asia and Russia (where Chevrolet is being pushed). The “doves” want to remain a global player.

A “former GM manager” told Die Welt that GM might keep the tech center in Rüsselsheim. It is owned by GM anyway.

In China, advisers close to BAIC told Reuters that “no formal offer had been made. BAIC President Wang Dazong, an engineer who spent 20 years working at GM, has said the company is aiming to expand outside its Chinese home market.”

Possible problems: Patents. Where there is a will, there is a way, as Ford/Geely/Volvo shows. Also, GM China might not be too happy about a stronger BAIC. But the Chinese market is big and has room for many.

BAIC is also rumored to be meddling with any Saab sales to parties that aren’t on BAIC’s birthday list.

Die Welt expects a decision as early as the next meeting of the GM board.

The German government (and this is where most likely the leak is) could do very little to stop that sale if Detroit and Beijing agree. However, German car companies would be highly alarmed, because the Chinese would gain a foothold right in the middle of Europe with a brand that would be much more suited to a low cost high volume producer than Volvo.