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

by Bertel Schmitt

Published: March 2nd, 2010

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.

#Aid #BertelSchmitt #Germany #GM #Government #Opel

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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Late_apex on Mar 02, 2010

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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.

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