In other words, it ain’t gonna happen. If GM was going to sell Opel to the Canadian-fronted Russian consortium, they would have done it. Remember, the German elections are coming. The sale would have pleased the Russians, Germans and Canadians, but since they aren’t going to do it before September 27, it’s a clear indication that GM’s either going to sell Opel to Belgian-based private equity boys RHJ International or . . . raise some cash, pay off the Germans’ €1.5 billion “bridge loan,” put some more money in the brand’s empty coffers and keep Opel as the US outpost of a nationalized American automaker that provides a host of unloved automobile platforms to moribund GM badge engineers. Automotive News [sub] doesn’t quite make that analysis, but it’s close enough for government work. At least they see the downside . . .
Sources familiar with the negotiations have said that GM is considering raising $4 billion to keep control of Opel.
GM could contribute more than 1 billion euros of its own money to retain Opel, while governments in the U.K., Spain and Poland that are home to major manufacturing operations would finance another 1 billion.
GM could also raise money by selling or mortgaging the automaker’s assets in China, one source said. GM is no longer barred from using funding from the U.S. government to support its international operations, but taking this route could trigger a domestic political storm in the United States.
Ya think? Not to mention how Chancellor Merkel will feel if/when she’s reelected after GM failed to help her out by flogging Opel to the Ruskies. Could Merkel call the loan and throw Opel into bankruptcy, so that the Russians could pick up Opel for pennies on the dollar? She could. One way or another, payback’s a bitch.
Angela Merkel will never let Opel go bankrupt, even after the election. Having told the German electorate for a year that chucking billions of taxpayers’ euros down the hellhole formerly known as GM is positively essential for keeping the German economy alive (an argument which Bob Lutz would summarily dismiss as a “crock of shit”), she’d commit political suicide by letting Opel go T.U. You see, Ms Merkel would sell her husband to a gang of drug-pushing cannibals if it got her one more vote.
(Never mind the fact that Opel on its own hasn’t made a penny of profit in the last ten years. Its market share has also evaporated from around 20% to below 10 today. GM-style cost cutting in the early 90s made damn sure that Opel’s reputation will be in the gutter for the next decade or so, although the cars they make are actually quite excellent now. Rumour had it even the staples in the sales brochures rusted through back then.)
Of course, no politician will get re-elected by telling the people that in the long run, it might be quite a good thing if companies selling products that nobody wants should go bust. What is this – a free market society?!
Interesting, I thought GM hasn’t got any OWN money. Oh wait, it’s taxpayer money that they say is theirs. Never mind, nothing to see here, move along.
When Russia and Ukraine squabbled over gas pipeline costs, Germany suffered a natural gas shortage and Germans froze. Merkel tried to prevent that from happening again by kowtowing to the Russians. Her government opposed the inclusion of the Republic of Georgia in NATO and threw them to the Russian wolves.
But Russia and Ukraine squabbled again and Germany suffered tight natural gas supplies again, though not as bad as the year before. You’d think Merkel would learn the lesson.
You’ve noticed that GM hasn’t used the money from taxpayers to repay the bridge loans?
I imagine they are now playing a game of England, Spain and Belgium against Germany. If the 1st three give GM the money to continue Opel then plants get closed in Germany, if the later gives in (GM keeps Opel) then the plants are closed in England, etc.
I doubt that GM ever had any intention of getting rid of Opel, just had to play the game that needed to be played at that time (nor should they abandon 10% of a 17m SAARS market (EU/non-EU)). And realistically Opel is to small to make it on its own, it needs to amortize it’s engineering/design over more than just the european market and US/SA/China sure seems like the best way to do it. With out the rest of GM how long before Opel just becomes a bigger Saab?
In regards to quality, I remember (I think) a time in the 80’s that GM (US) had the lowest rated quality in the world while Opel had the highest.
How’s this for a Crackpot Theory:
GM can’t afford to sell Opel or Hummer. They need to hang on to them because they lose money. Since they lose money, then they can put other losses into the black box loss makers and then ask for more money from Uncle Sam. As soon as they sell these loss makers, then they have to show profit. Since we know that fundamentally, things haven’t changed at GM, so they need to have a scapegoat. And as long as they’re saddled with a couple of losers like Opel and Hummer, they can show a loss.
So endeth my Crackpot Theory.
Number One – I really don’t see how Opel is essential to the German economy. I do think it is essential that the politicians cover their political butts.
Second – I’ve seen estimates claim that it will take 10 Billion Euros to turn Opel around over the next few years. GM doesn’t have it and they probably aren’t going to get it.
Eventually the German politicos will force a deal. It may or may not be to the liking of the GM mother ship.
There’s a part of me that, to this day, wants a 1970’s Opel GT in the worst way.
The real reason GM is fighting all the way? All the valuable small car tech is vested within Opel, and anyone who grabs Opel will be an immediate small car competitor for GM in every market.
GM should have gotten serious about selling Opals in the US instead of blowing billions creating Saturn. They might have gotten a lot of people into a GM product without them really knowing it. It could have been marketed as an upsacale European import like an Audi or BMW, and it might have caught on a little better w/o all of the investment that Saturn took, although it would have taken a separate sales channel like Saturn, not an afterthought at a Buick dealership like in the ’70’s
Would have negated any reason to buy SAAB too.