Not literally. But close enough. At this point, GM would gladly transfer ownership of its German division to Daimler for about the same price Cerberus paid Daimler for Chrysler (without withholding a 19.99 percent share). Yesterday, GM’s European workers took the streets in Austria, Belgium, France, Poland, Russia, Spain, Sweden and Britain. They were protesting fact that their employers may stop paying them to build cars no one will buy. The International Herald Tribune ties cause to effect (not terribly difficult but needs must): “Targets outlined in the [congressional viability] report included the elimination of 47,000 jobs worldwide, including 26,000 outside the United States, $6 billion in grants from governments abroad by 2010 and labor-cost savings in Europe of $1.2 billion.” GM will no doubt use the industrial actions as a gun to the head of foreign governments, extorting bailout bucks in the great American tradition. (Collusion anyone?) Students of the Roman Empire know the deal: the foreign outposts revolt as the center no longer holds. Or, as Chinua Achebe pointed out, things fall apart.
I already posted this… but it sill makes me mad.. here the copy
“I think the news is that Opel slept 2 years ago when they wrote their licensing contracts. According to this article GTO in Delaware owns all the rights to the cars. So if Opel becomes independent they have to pay license fees for the cars they developed. I’m not sure if they also have to pay if they develop cars based on those developments.
Since the German government (understandably) refuses to give money as long as it could go to the US, there probably won’t be Opel anymore. and an independent Opel without patents for cars is just a factory building.
Now I also know why GM tries to liquidate Opel (i.e. trying to sell the Eisenach factory)
Really sad, the Opel factories have to work extra shifts because the demand for small cars is larger than supply (yes, happening as we speak…)
Opel was really bad in the 1990’s when the American management forbid all quality (they did not allow corrosion proofing, so the Germans had to “illegally” corrosion proof the cars and had to hide the corrosion proofing areas when people from Detroit came to visit). When VW introduced the Golf IV that was fully galvanized, GM refused to have the Astra galvanized (fortunately they eventually gave in).
Die, GM die! Everything valuable that you touch turns into ashes, GM is worse than those investment companies, GM just sucked the life out of every brand they bought to keep themselves alive for some more time. GM, die… without Opel you don’t have one single car that is worth talking about.”
Kaleun is wrong in only one aspect- the Corvette would still be worth talking about. It is a nice thing to stand near, look at, sit in and drive.
Also who is GTO that holds the patents?
The Little 3 have been galvanizing their vehicles since the early 80’s in NA, hard to believe they wouldn’t allow it in Germany.
Nice Achebe reference.
Lets see if I understand,,,, “They are protesting the fact that their employers may stop paying them to build cars that no one will buy.” Sounds like a reasonable plan to me.
johnny ro :
It appears that GM set up a company, GM GTO, to hold the IP of Opel here in the US. Opel pays GM a royalty on the cars it produces.
So kaleun : is right in that the German portion of Opel wouldn’t have its own (historical) IP but I don’t think that would be a big problem to overcome. At this point GM would take a modest amount to hand it over.
I think GM owns Opel, and for decades in the good times has invested Billions and Billions of dollars, euros, etc. into Facilities, tooling engineering and taxes. They have also provided good paying jobs for thousands. Now in the bad times it appears the communities and employees have decided to turn on them. I guess loyalty is not a European trait. Eighty years ago their forefathers were lead around by their noses. Who is leading these people now?
Juniper: How about the billions and billions of dollars that Opel made for GM, that was transfered out of Germany and into the GM coffers? How’s that for loyalty? Make no mistake, GM has made a bundle of cash on Opel throughout the seventy plus years it has been owned by GM. It’s all about the money…
You can hardly blame Opel for not wanting to go down with the mother ship. GM hasn’t been investing in Opel in excess of Opel’s profit. On the contrary, Opel has been returning cash and engineering to the mother ship for most of the past twenty years. What do you think Opel has gotten in return for handing over designs to GM-Daewoo and Saab? Where do you think GM’s four cylinder engine designs came from? ( http://en.wikipedia.org/wiki/GM_Family_II_engine )
Fiat managed to turn around once it got out from under GM Corporate. Granted, Fiat like everyone is struggling now, but it has done a whole lot better without Detroit’s “oversight”.
Ingvar is right here, and for some very obvious reasons.
Large multinationals make certain that they do not end up paying taxes in high tax territories, and do what they can to reduce these taxes as much as possible. Nothing illegal, just judicious use of money, point of invoicing, intercompany invoicing, etc. Which means that when money is “pumped” into a brand – i.e. the billions GM pumped into Opel. Saab, etc., one should also take a very good look at whether that money was used to reduce taxation, and whether revenues made from the sale of cars manufactured were taxed at country of manufacture, or elsewhere, and how intercompany invoicing was carried out, etc.
John Horner
I think GM can do anything they want with their profits. And that engineering you talk about is part of what they did with those profits. The engineering is part of the investment and good jobs I am talking about. GM paid for it and owns it.
“How about the billions and billions of dollars that Opel made for GM, that was transfered out of Germany and into the GM coffers? How’s that for loyalty? Make no mistake, GM has made a bundle of cash on Opel throughout the seventy plus years it has been owned by GM. It’s all about the money…”
Now this is an interesting statement. Of course it’s impossible to prove one way or another although it’s safe to say that if true, GM certainly doesn’t have much to show for the “billions and billions” at this point.
But it’s interesting because of all the comments on both sides of the fence here in the US about buying most of our autos from transplant mfrs., this time from Japan. Some say that it is not good for the same reason: money leaves the country here and goes to Japan. My impression is that Germany, and most of Europe, still buy predominately home-made products.
Is this (Opel hard times), in part, a backlash against foreign manufacturers? Or just GM? Or just a coincidence?
@Juniper:
Most of the engineers in the “GM”-Design-Center in Rüsselsheim do have work contracts with “Opel” printed on them. So they were all on the Opel paycheck while working for GM globally. And you want to tell me that GM has pumped money into Opel?
As I heard in the news the Opel’s books are missing more than a billion € that GM has taken out and never has given back. Additionally all the IPs have been transferred to this dubious GTO GM company.
As we all know Opel is having the lead on all front wheel drive platforms and four cylinder engines. Now tell me please how GM wants to reach the new standards set by the US government for fuel consumption without Opel’s knowledge?
Oh, yes … they could take some more shitty Daewoos and brand them as Chevys. Now this will really save them ….
I find the argument that Germany refuses to bail out Opel because money could go to the USA a complete crock. Perhaps they mean the money could be swallowed by GM as an entity — that I can understand. But GM is not the USA.
However, all these bailout budgets in many countries do mean that people have to realize that today we have international trade, and that xenophobic calls that money has to be spent in the home country are ridiculous. And self-defeating. It’s the global economy that’s screwed as well as local ones, and nothing will return to normal anywhere until it all starts to return to normal everywhere.
Thank goodness the average poster on TTAC swollen in righteous rage at the direction his government has taken, is not in charge of things. We’d be in the drink before you knew it if most of the hare-brained stuff I read here was implemented. At the very least there would be far more people unemployed and on the soup lines if some stone-faced person insisted on applying free-market principles to the letter, just because it’s right.
GMe is struggling badly – they lost $1.6 billion last year because of the difficult market and currency movements. That’s the same year that Ford Europe made $1.0 billion with the same market and currency movements.
BTW – I think many multinationals have their IP owned by one entity and the national operations pay a licience fee to use it to build the product. Probably for tax reasons or just to make ownership of the IP clear. It would only become an issue in the case of a breakup/selloff … oh yea, that’s where GM is now.
GM has outsourced most of their passenger car engineering to Opel. How can they be separated from the mouth that feeds them.