Suspense in Berlin runs high. At 2 p.m., a meeting was held, German politicians only, no bidders, no GM, no treasury staffers. Fifteen minutes later, Chancellor Angela Merkel left the building—Opel watchers saw that as a sign of a final breakdown. Then at 3 p.m., GM and Magna show up at the Chancellory. Fifteen minutes later, Angela returns. At least they are still talking. 3:55 p.m.: The summit has been re-scheduled. Will start at 6 p.m.. It will be a long Friday night again in Berlin. If talks break down, it will be lights out in Rüsselsheim . . .
Opel will be out of cash and unable to meet payables this coming Wednesday, if the company does not receive €300 million immediately, Automobilwoche [sub] says, quoting unnamed sources inside of the Berlin negotiations. A bankruptcy filing will be inevitable. The way GM currently is negotiating, it seems like GM wants to see Opel go down with them.
With unwavering chutzpah, GM even offered to buy back Opel some day “when we do better after a restructuring phase.” Flying pigs were spotted in the vicinity of Berlin’s Tegel airport.
Quick help for Opel may be frustrated by EU politics—or not. José Manuel Barroso, president of the European Commission, reminded everybody that “EU rules must be met” when rescuing European subsidiaries of GM. In March, EU member had agreed that there will be no rescue attempt “without preceding information of and coordination with the other affected European member states.” It’s the Pentecost holiday and on Monday, the banks will be closed. Some fast consultation and coordination will be in order to get the money to Opel—if someone is found who has it sitting around. As a precaution, representatives of EU members with Opel plants congregated at 3 p.m. in Brussels, officially for “an exchange of opinions.” Unofficially, to be sufficiently informed and coordinated in case a decision is reached in Berlin.
Let me guess what happened. Someone at GM told the German negotiators before Wednesday’s meeting that the US Treasury would pony up the 300 M Euros needed to get the Debtor in Possession package rolling.
Enter the junior rep from the US Treasury. There is no 300 M Euro / 430 million dollar package ready and to make matters worse, this fool tries some strong arm tactics – which backfire. Again, this is just a guess.
Hence, the reason for Fritz Henderson having to apologize yesterday and say it is all a misunderstanding – which is GM’s fault. I’m putting this all together reading tea leaves.
My next guess is that raising 430 million USD or the new figure of 600 plus million is not going to happen by next Wednesday. Providing this level of funding in two days just isn’t possible in a European democracy, except for Moscow – which isn’t so democratic and not subject EU meddling.
So my final guess is that the German’s went to both Magna and FIAT to say we need 300 M Euros, if you want Adam Opel. Marchionne balks at this poison pill and has left the table with his marked cards for Turino. Magna needs to find a way to pony up and the only door open is in Moscow – albeit with conditions.
I like the way you think, NotSoOldAndSlow ….
Nothing like a good catfight. let’s have some popcorn.
@GS650G
+1
Would you mind sharing yours?
Germany can not afford an Obama bailout. Cannot!