The GM-Opel-Magna-Sperbank deal is on its last gasp. On Friday, GM’s chief Opel negotiator, John Smith, said that nothing will happen until the GM BOD will get around to reconsider the sale at its next regular meeting on November 3, says Reuters. In the meantime, the matter turns into a chain letter exercise. Chain letters everybody wants to receive, but nobody wants to write.
As reported by TTAC, EU competition commissioner Neelie Kroes wants letters from all parties involved, certifying that the deal had not been reached under political pressure. All parties involved, meaning GM, the Opel Trust that officially owns Opel, and the German government. Except a vague note from Berlin to Brussels, no letters have been written. Nobody wants to write, everybody wants to receive a letter:
Reuters says that “German Economy Minister Karl-Theodor zu Guttenberg has asked GM to confirm that the automaker chose Magna for business and not political reasons.” No reply.
Instead, AFP reports that many members of GM’s Board of Directors now demand a letter from the German government that states that the €4.5b will “only be paid if the sale goes to Magna and Sperbank.” According to AFP, GM had sent am E-Mail to that effect to Berlin. No answer yet. Probably eaten by the SPAM filter. “The hell we will” was the most likely behind-the-doors reaction in Berlin. If that letter would be written, the deal would be DOA in Brussels.
According to Der Spiegel, the GM board hopes that they can keep Opel, collect the €4.5b in Berlin, close a plant or two in Germany, and send thousands of workers collecting unemployment benefits. Or else, Opel could go bankrupt. Again, GM is misreading German intentions. As reported previously, Berlin will happily choose bankruptcy, especially if they can blame it on the ugly Americans and/or the persnickety commissars in Brussels.
Marchionne was right, the Germans think it’s a soap oprea, not a bussiness deal. Give it to Fiat or bust.
Why is John Smith chief negotiator? he was a resounding disaster as head of VSSM before Lovejoy.
Stronach’s reach may exceed his grasp. Too many automakers are chasing too few auto buyers. Magna dodged a bullet when the Chrysler purchase fell through. He should be grateful the wheels are coming off the Opel deal, especially with automakers threatening to pull their Magna contracts if it becomes a competitor.
Let me guess how EU politics will work.
If the EU Commissar for Competition, Neelie Kroes holds up the Magna/Sperbank deal with a proper antitrust investigation, Opel will be declared insolvent and there goes 50,000 jobs during a recession.
Some of those 50,000 lost job will be in Antwerp, Belgium. What’s the current unemployment figures looking like in the Flemish portion of Belgium?
On the other hand, should Kroes look the other way and allow the German subsidized deal go through, some job losses are inevitable for Antwerp even in the best scenario.
Either way, the Opel’s Belgium work force will shrink.
The VW-Porsche saga is about over, but the Opel Story yet unfolds. Who knew the Germans were capable of such drama? You have another novel-writing opportunity, Bertel.
It’s hard to predict how the Magna-Opel deal will turn out. I still think the deal will go through. Too many different groups have invested too much in the deal to let it die.
But the deal may die. And it should. If Magna does get Opel, a year from now Magna will wish it hadn’t.
So Gardiner Westbound is right that Frank Stronach’s reach may exceed his grasp. That’s as it should be. Or what’s a heaven for?
GM needs to be clear. If it favours a deal from Fiat or RHJ then it needs to say so and then ask the German Government to confirm in writing that the money would be available to support either deal.
That would put the German government in a very tight spot, especially considering Fiat was willing to keep a lot of plants open.
GM had sent am E-Mail to that effect to Berlin. No answer yet. Probably eaten by the SPAM filter
These matter are not handled through emails… If I were Berlin I’d say: the hell with this. Send a written letter MoFos, signed by your CEO.
“The hell we will” was the most likely behind-the-doors reaction in Berlin.
Would be lovely to hear it in German… but yes, if they answer they will give proof to GM. They’re NOT stupid.
GM is not going to reply to both EU or Germany because it’s not convenient for their interests. Period.
This game is far from done. I’m curious, but I haven’t read much about the russian’s moves.
GM should get permission from its new overlords to transfer the money to both Opel and Daewoo if it don’t want to repeat Chrysler’s history.
The GM-Opel-Magna-Sperbank deal is on its last gasp.
No other Websites seem to think the deal is in danger. Will TTAC be the prophet who gains credibility because it gets this prediction right? Or will TTAC lose credibility when the deal goes through a little late?
Time will tell.