By on June 10, 2011

Day 2 of the Opel rumor mill, and it keeps on grinding. Is Opel up for sale or is it not? Opel, their works council and regional governments close to the labor unions dismissed yesterday’s reports of a possible sale of Opel by GM as pure speculation. Yesterday, Opel chief Karl-Friedrich Stracke sent a letter to all employees. Today, he called an all hands meeting in Rüsselsheim and appealed to his workforce to ignore the nasty rumors. What is missing: A clear denial from Detroit. Today, Germany’s chancellor Angela Merkel demanded that GM should “provide clarity regarding the future of Opel,” writes Der Stern. And the magazine adds: “GM however continues to take cover.”

Both works council chief Klaus Franz and Thomas Bieling, head of Opel’s dealer council, are looking for a clear statement from Detroit. “A letter by Mr. Stracke won’t put me at ease,” says dealer-boss Bieling. “I want a letter from Mr. Akerson. So far, there’s nothing.”

Franz wrote a letter to Merkel and asked for help. GM seems to be back to the dangerous game of ignoring the German government. The Handelsblatt reports that both Merkel’s spokesman Steffen Seibert and Beatrix Brodkorb, spokeswoman of the Germany Ministry of Economics state that the German government is in touch with Opel, but not with GM. Ever since GM reneged on Opel, Detroit and Berlin are on cold war footing.

Even the all hands meeting in Rüsselsheim could have been better. Says the Handelsblatt: “Stracke called the reports ‘speculation,’ but he did not deny them unequivocally.”

One thing is clear: Currently, Detroit would be happier without Opel on the books and dragging the newly minted stock down. Last year, Opel did cost GM $1.76 billion in losses. In November 2010, Opel chief Reilly had expected $2 billion worth of red ink. Apparently, some of that was moved into 2011. Closing down Antwerp in 2010 did cost some $200,000 per worker. Reportedly, the colleagues in Bochum sold their skins for a little more. Severance payments of up to $360,000 will flow. In the first quarter of 2011, GM tripled its profits, Opel continued to hemorrhage.


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21 Comments on “Opel Soap, Day 2: Detroit Snubs Frau Merkel, Again...”

  • avatar

    I thought Sergio was interested in buying Opel to create his international automotive juggernaut.

  • avatar

    OK, let’s recap:

    Akerson: “fed up with Opel, and the turnaround isn’t gaining traction… He is trying to think of all possibilities to improve performance. But a sale is wishful thinking.”

    Stracke: “rumors and speculation in the press… I am wondering why this question comes up precisely now, when we are back on the path to success”

    There’s no denial in these denials. “A sale is wishful thinking,” says Akerson… but whose wishful thinking? Akerson himself could be wishing to sell Opel and his statement would still be factually true (as far as these things go). As for Stracke’s “why would they sell us when things are turning around?” question, it not only demonstrates the disconnect between Opel and Mama GM (Akerson is “frustrated” but Stracke has Opel “on the path to success”) but it also could signal that a deal is in the works. After all, don’t you sell things when they’re looking up? Buy low, sell high, that kind of thing?

    I may be making too much of a few turns of phrase here, but there’s not much to work with here. And the fact that the bosses of both GM and Opel use turns of phrase that could actually signal that a deal is afoot (while VW issues a mysterious “no comment”) is interesting. If there’s nothing at all behind this rumor, somebody better issue an unequivocal denial before the weekend.

  • avatar

    Look for Merkel to take a hard line with GM no matter what happens. Her party has been hammered in local and state elections because of the PIIGS bailouts. She is on her way out soon and standing up to GM will be a last ditch chance for her to have any hope of retaining office.

  • avatar

    I agree with EN, not much to go on here. My guess is that they won’t sell Opel. They are too integrated into GM’s R&D. If anything I could see an alliance coming out of this. Something to help offset costs during the restructuring.

  • avatar

    the banksters want out of German wages and union influence. this economic war will continue, if only gradually, to shift production out of the Deutscheland as there isn’t much chance of instituting second tier pay. the UAW leadership was a relatively cheap purchase whereas the German labor leaders wouldn’t even consider selling out their members.

  • avatar

    My feeling is that Akerson is not happy with the progress and this is his way of lighting a fire under their asses, especially since Stracke thinks things are going swimmingly.

    Nobody’s going to buy Opel – sure, VW can but why would they when they can sit back and deny everything and watch the doubt creep back into the customer’s mind while this implodes under it’s own weight.

    We all saw how well things turned out for Pontiac when Lutz called them a dead brand – same management style, different day.

    • 0 avatar
      Hildy Johnson

      Pontiac was just a badge, Opel is an actual company. Somebody definitely would buy Opel. The question is whether it is going up for sale, and if so, whether this will happen with or without bankruptcy.

      The most likely buyer would not be VW but the Chinese government – with someone fronting for them, as Geely did with Volvo. Think about it: If you were a Chinese government bureaucrat in charge of allocating some surplus dollars, what would you rather buy – a technologically proficient foreign company, or some more US government junk bonds?

  • avatar

    China’s BAIC wants to buy Opel ( ) .

  • avatar

    It seems to me the reason GM was unable to sell Opel previously was because GM was too inept to meet their own timelines on the matter. And now, when multiple, “critically acclaimed” GM models are essentially re-badged Opels, they’re thinking about selling again? L.O.L.

    I would really like to see the German people pony up the dough, buy Opel, and cut GM completely out of the picture. At least then, they would have the ability to impact the return on their investment. (And it would be interesting to see what the next generations of Malibu, Lacrosse, Regal, and such looked like.)

    • 0 avatar
      Hildy Johnson

      “I would really like to see the German people pony up the dough, buy Opel, and cut GM completely out of the picture.”

      A German government motors? Good luck with that.

      A sale to the Chinese would be best. In this way, Opel would gain a privileged status in the world’s biggest car market. If the Opel engineers and workers are indeed as good as they are cracked up to be, they will be able to make the case for their continued employment to their new owners, just as seems to be happening with Volvo.

  • avatar

    “Last year, Opel did cost GM $1.76 billion in losses.”

    That is all that needs to be said. IF GM can get anything for Opel at all, it would be a win.

  • avatar

    Steven02 – I thought Opel was still to lose money this year due to site closures. As Patz says GM gets stuff out of Opel which may not be captured in the profit/loss accounts – depends on their cost centre structure.
    Ford of Europe also loses money but Ford are not pulling out of Europe because they know the European operations provide key technical and engineering input which is behind some of their resurgence. As the European and US markets converge more (greater sales of compact and sub-compact cars in the US etc) then the rationale for a European operation grows. Although both GM and Ford should be able to make a profit in Europe if Fiat and VW can (amongst others).

    • 0 avatar

      Good point, Mike.
      I cannot comment on financial’s result – this stuff is a bit too out of my knowledge, I am more car/engineering oriented than financial….
      But I am sure GM takes much profit out of Opel’s engineering. This is ‘hidden’ behind the pure Opel money results. And actually, Opel in Europe is a strong brand with an increasing appreciation by the people. Sales are going up, and new models are even more attracting customers.
      But the European market is still at lower volumes than in the past, so it means that the money is still less than before.
      You are also true, if other OEMs can make money, then even Opel should do it.
      At the end – I cannot really judge if these rumours are true. It scares me, when I see no replies from Detroits. Maybe they want to ‘push’ a little bit on Germany, maybe they are looking for an alliance.
      But on the other hand, GM cannot completely ‘leave’ Opel – they would loose the European market.
      OK – there is Chevrolet. But in Europe customers are seeing Chevrolet like Daewoo-rebadged cars, so corean cars. And actually, it’s fully demonstrated by the much lower sales volumes, when compared to Opel. Opel is close to play a leading role in Europe, Chevy is (unfortunately) far away.

      • 0 avatar

        If you follow the link to the Die Welt article, I believe it says if Opel were sold, that it would be the production facilities and not the engineering center. My German reading comprehension is not great, however. Feel free to correct me.

        However, it seems to me that the last time this idea was put out there, there was a distinction between Opel and GME (General Motors Europe), and whatever had been dreamed up in Russelsheim belongs to GME, not Opel. Here we start getting into intellectual property distinctions, and I can’t say I know how it all works.

        I really think the most likely effect here is to light a fire under the new management of Opel. I think it’s undeserved or unrealistic, to match the financial performance of GM USA. I would think that there would be far less expensive/complicated car companies for the Chinese to harvest.

    • 0 avatar

      I agree that GM uses a lot of the tech from Opel. The EPII and DeltaII platforms have work from Opel on them. I am not sure where the engines are developed, but with all of the available engine choices in Europe, I am sure they have a hand in that as well.

      But, I read in article today that Opel was supposed to break even in 2011.

      Hard to say what is going to happen. But, I believe a lot of the costs are already behind them.

  • avatar

    Opel may end up being for sale, but nobody’s going to buy it. See script on Hummer, Saab, Saturn, and Pontiac for how it will go. The cast of characters will include wealthy Chinese conglomerates, small-time sports car mfrs, and celebrity car guys, all of whom will fall through in the end.

    Forget it; Opel will go down eventually, because GM can’t afford the losses and Germany is not interested in them.

    • 0 avatar

      Sorry, I do not agree with your comment.
      Hummer was a brand, producing very particular cars and for really small markets (very low volumes out of the U.S.)
      Saab was in a disaster mode. Unfortunately. And it’s still. It was a premium brand and manufacturer, with an extablished customer basis. But a small basis. And in my opinion wrong decisions has been made in the past by GM on Saab. They could have done of Saab what VW has done of Audi. They could have made a full ‘premium’ lineup of vehicles basing on the Opels (as Audis to VW).
      But it’s always easy to say when you don’t have the steering wheel in your hands ;)
      Saturn and Pontiac where brands as well. That’s not the right comparison, I think. In Europe, GM doesn’t have so many brands. They have Chevy and Opel mainly. Then, Cadillac (but with ‘transparent’ volumes to the market…)

  • avatar

    good point. Your understanding is right (also my German is not that good, anyway, so we might both be wrong…)
    Actually, interesting. I also cannot really understand the difference between Opel and GME – when we talk about legal or financial stuff, I always have hard times in understanding what’s really going on.
    But you know, the Ruesselsheim engineering is almost a ‘one thing’ with the manufacturing, so I see a separate selling quite difficult. And I wonder who would really want to buy those ‘expensive’ plants. Also the Vauxhall facilities are very important and sensitive.
    Let’s see what’ll be next.

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