GM is no longer in hock with Germany. They paid back all of the €1.5b bridge loan Opel had received from Berlin to keep it afloat until it was taken over by Magna and Sberbank. As we all know, this didn’t happen. Berlin wanted its money back, and got it.
“I can tell you that the last funds for Opel have been paid back by General Motors,” said German Chancellor Angela Merkel. “I expect at least a thank you letter from General Motors in a few years.” There isn’t much love lost between GM and Berlin these days.
In the meantime, the liar’s poker surrounding Opel continues. There was a meeting in Brussels to which all of Europe’s Economy Ministers were invited. Most sent their deputies. The meeting concluded with everybody swearing not to do anything in aid to Opel without consulting the others. Such an oath of allegiance had been made before, and broken.
GM’s Nick Reilly had traveled to Brussels to meet with the officials, including EU Industry Commissioner Guenter Verheugen, and EU Competition Commissioner Neelie Kroes. Reuters reports that after the meeting, Verheugen said that “General Motors made one point very clear, 100 percent clear, the restructuring plan could only be achieved when European member states with Opel plants give some financial help.” Ten days ago, GM’s Chairman Ed Whitacre had said that “we will pay for it ourselves.”
As far as Germany is concerned, GM and Opel are on their own. With the bridge loan paid back, the Opel Trust will be disbanded. Germany’s new Economy Minister Rainer Brüderle is opposed to any help. Yesterday, he said on national TV: “Like any German company, Opel can hand in an application for aid. We will review the application as in duty bound. Opel is not entitled to aid.” Brüderle said that keeping jobs is a worthwhile goal. “However, the German taxpayer is no sugar daddy.”
Brüderle said that keeping jobs is a worthwhile goal. “However, the German taxpayer is no sugar daddy.”
Obama and Geitner, here is a teaching moment for you both. Perhaps you should invite Mr. Brüderle for some beer at the White House.
Interesting. Perhaps the UK didn’t attend that meeting.
Britain ready to support GM
http://www.autocar.co.uk/News/NewsArticle.aspx?AR=245285
Nice to know that German taxpayers are considered by their government. We in the US clearly aren’t.
Cut a 1” wide strip off a sheet of paper.
Hold the strip horizontally on edge and blow across it. It bows out but is stable.
Hold it horizontally flat and blow across it. It vibrates like crazy.
You have just demonstrated the phenomenon the engineers of that time did not know: Thin wide things vibrate in a airflow. Counterintuitively, increase the depth and it settles right down.
Engineers now use a ratio, probably named after the dog on the bridge, comparing the depth to the height of the section to determine how likely it is to become unstable in a gas or liquid flow.
It rarely pays to mess with the Germans.
Patton would disagree.
The [US Taxpayers] paid back all of the €1.5b bridge loan Opel had received from Berlin…
Ten days ago, GM’s Chairman Ed Whitacre had said that “[the US taxpayer] will pay for it ourselves.”
Corrected.
It’s nice to see a TTAC column which acknowledges — finally — that the Opel deals and negotiations are (and always were) political kabuki aimed at extracting cash from American taxpayers. Perhaps we will now be spared long comment threads by posters mesmerized by phony issues like keeping Opel technology out of the hands of the Russians.
This theme also applies to Fiat-Chrysler. Much as we car folk like to talk about engines, transmissions and models, nothing about these particular companies and their deals has anything to do with cars anymore. Now it is all about the ability to tap into government largesse. A failing company like Chrysler, even if it collapses, can produce a big win for an investor like Fiat when Washington bribes Fiat to take Chrysler off its hands so that the failure doesn’t rebound onto Washington’s doorstep.
Good for Germany. Merkel is far superior to ANY other country leader. How to Negotiate, V 1.1!
“Opel is not entitled to aid.” Brüderle said that keeping jobs is a worthwhile goal. “However, the German taxpayer is no sugar daddy.”
The same should apply to those of us in the States
Reading the comments above, I can’t help but think you guys weren’t reading this story from the beginning. This is not a victory for the German government in any way. They were falling over themselves before the Sept. election to give money to Magna so that Opel could be saved from [“the horrendous burden of”] American (mis)management control. When GM finally realised they need a compact-car engineering strategy and might actually need Opel R&D in future, they effectively ‘flipped the bird’ at the German gov’t.
In that one move, GM managed to sting the German national pride, allowing the post-election government to take a ferocious line against GM.
If anybody has saved the day, it has been the EU Competition Commissioner (a Dutch woman by the name of Neelie Kroes). She gave the German gov’t a slap on the wrist for tieing state aid to German job protection and allowed GM to do a U-turn. And now she has created the conditions that no EU gov’t is allowed to speak to GM about financial aid, UNTIL GM has revealed its hand about what jobs it is going to cut, breaking the link between aid and job protection.
The headlines should read, “EU fairly manages national interests AND global corporations, for benefit of European citizens”.
Dicky, you’re being suckered by the orchestrated action on the stage.
The EU ruling is part of the smokescreen European governments are hiding behind so that they can claim their hands are tied. This obfuscation helps them defuse the issue so it can not be used against them effectively by their domestic political opponents.
Their primary goal, however, is to leave GM (i.e. the US taxpayers) holding the bag and footing the bill — without it looking like that’s what the Europeans are doing.
It’s hardball, pure and simple.