By on December 11, 2012

A day after GM’s announcement to close down most of its Bochum plant, Germany’s vice chancellor and economy Minister Philipp Rösler blamed GM’s management for Opel’s misery. German carmakers like Volkswagen, BMW or Daimler are relatively unaffected by the European contagion, because they are successful in export markets. “It has been a mistake that Opel was more or less kept out of the growth market China,” Rösler told the Rheinische Post.  “There will be no financial help, because it won’t solve the management problems.”

Interim CEO Thomas Sedran was surrounded by a phalanx of security guards when he made his very short announcement yesterday. Outside, an armada of police was ready to intervene. The workers were peaceful, the security guards were not. A shop steward was knocked to the floor and choked by security guards, works council chief Rainer Einenkel told Der Spiegel. The union considered going on strike, but decided against it because there will be “short work” anyway in January.

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19 Comments on “German Government: No Bailout For Opel, Management To Blame...”

  • avatar

    So I guess that clearly delineates the government’s opinion of foriegn versus domestically headquartered employers. “opel” doesn’t make cars in China, but “GM” does. Quite a few actually, and it’s probably the only reason they have the market cap that they do.

    I don’t know what Opel was asking for, but if I was a worker for Opel, I wouldn’t like the idea that I’m not as important to my government than a worker at the german companies. There’s probably a whole raft of good reasons not to help, but “because your bosses are dumb” is not a really good one. BMW and Daimler are in good shape not because they strategically chose to export cars from Germany to China. They had to because the volume in the premium market doesn’t warrant a plant, whereas in the volume segments, plants are more quickly economical in emerging markets.

    Is the Spanish government saying that they won’t help SEAT workers because the dumb german bosses at VW aren’t exporting enough SEATs to China? That sounds silly to even say it.

    • 0 avatar

      Opel once had 40% of the EU market, just as GM once had 50-55% of the US market, they ran it into the ground, not opel per se, but as GM was circling the drain in the late 80’s they sucked everything dry they could, that included Opel. aka, If Opel was profitable, that money was sucked out instead of being re-invested, why would Germany rescue something that was killed and give it back to the people who killed it?

      • 0 avatar
        doctor olds

        GM is more sucessful than the German companies in China, they just use different brands than Opel. None of the Germans export many vehicles from Germany to China. The Chinese wouldn’t let them, even if they could do it profitably. They all have joint ventures, as required by th Chinese government.

        The rest of GM has been carrying Opel for at least a decade.
        Rosler is just playing to the workers at Bochum who helped put themselves out of business by being too expensive.

        Translate the article and you will see that it does not say exactly what Mr.Schmitt writes. The politician is talking specifically about the plant at Bochum, not the state of the Opel brand.

      • 0 avatar
        Polar Bear

        40% market share? Opel has fallen to 6% now. How very GM-like.

    • 0 avatar
      Secret Hi5

      “I don’t know what Opel was asking for . . . ”

      That’s a good point. The article does not state who was asking for state aid. Was it the union? Anyone??

    • 0 avatar

      Have you ever heard of creative destruction? It’s when certain companies die out, and yes, in the short term, workers lose jobs, people get hurt, but in the long term, the continuous weeding out of bad companies allows good ones to flourish, and a country’s economy is kept healthy and dynamic. Countries that overly fear this process may save jobs in the short term, but ultimately will build a stagnating economy that will no longer be as healthy/competitive, etc.

      • 0 avatar

        I think you mean competition or capitalism. Creative destruction usually refers to disruptive innovation coming from new entrants and the old players never jump out of the slowy boiling pot and lead the reinvention at the cost of their old business or business model.

        The germans have been eager to see Opel independant of GM since before Frank “Moses” Stonach told them it was the path to salavtion.

        Any government that gives the workers codetermination rights and long-ass, painful workers council-led layoff negotiation processes, is not the shining beacon of capitalism. Germany is industrious, committed to education and benefiting from a currency devalued by PIGS (plus an open market to PIGS). Great stuff, but not text book creative destruction.

  • avatar

    “There will be no financial help, because it won’t solve the management problems.”

    This guy will never be President of the United States.

  • avatar

    Why would GM want Opel to export to China, when there is Buick, Chevy and Cadillac. It makes sense for them to be a regional brand (just like Skoda, SEAT, Dacia and Renault are) and for platform and part sharing to occur – which is what happens in part with Opel and Buick.

    • 0 avatar

      I would think zee Germans don’t consider the European market the one to be in at the moment for a fledgling automaker. South America perhaps? What is Opel’s perception there?

  • avatar

    Where’s the bizzarre anti-union rant?

  • avatar

    Who killed Opel? I think it was Rick Wagoner in the Board Room with a lead pipe.

  • avatar

    I hope they offer all the engineering staff a job in Detroit or elsewhere in GM. let Germany suffer the brain drain.

  • avatar
    doctor olds

    Opel/Vauxhall is just one (conjoined twins?) of GM’s brands, a regional product from an integrated Global company. GM is doing well enough, in terms of sales, to be #1 in the two largest markets in the world, and #1 or #2 in all of their regions besides Europe, where GM earns only 4th place. GM has carried Opel, but continual declines in the regions total sales mean capacity must be reduced.

    Opel is 3rd in Germany after VW and MB

    Vauxhall is 2nd in England, afer Ford

    Opel’s 1.2 million volume in Europe is similar in scale to Honda’s US sales. They just have problems reducing workers and plants in line with sales volumes to restore profitability. I wonder if VW factories in Deutchland, isolated from the rest of VW, are all that much more profitable than Opel’s. They don’t break out that figure, to the best of my knowledge. GM overall made a lot of money, too. Closing Bochum is a move in the right direction. Is it any wonder a politician would decry the company that is taking German jobs? The truth is, GM needs political change to reduce labor unions’ stranglehold on industry in Germany.

    • 0 avatar

      The real question is if GM can scale their European volume down to their European demand. It’s fine to laugh at Honda for their North American sales, but that doesn’t achieve much when their North American demand keeps their North American factories running near capacity while Opel tries to figure out what to do with a bunch of redundant factories.

  • avatar
    Robert Gordon

    As an aside, why has TTAC completely ignored the death of Dr Alex Moulton?

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