Forbes‘ former GM Kool-Aid drinker, Jerry Flint, has finally cottoned on to the fact that GM is going to hell (and not back). The Ascot-Wearing One sees today’s announcement that the nationalized American automaker is selling its Opel brand to a Canadian-fronted Russian mob as a harbinger of doom. (Substitute the words “yet another” for “a” and you’re there!) “Opel, and the cars made in Britain under the Vauxhall name, account for more than 1 million sales a year, but the operations are more important that the sales. The German unit is the heart of GM’s car engineering, and particularly the creation of front-drive cars and compact-size cars. U.S. models are derived from these cars, such as today’s Chevy Malibu.” Oh, no! No more world-beating Astras? Hang on, isn’t Daewoo engineering GM’s small cars?
Germany’s Chancellor Angela Merkel herself has confirmed that GM is ready to sell Opel to Magna. The offer comes with yet to be disclosed conditions. However, according to news-adhoc, Frau Merkel “doesn’t have the impression that behind the announcement of Opel is a hidden agenda that sets the threshold so high that in the end there won’t be a sale.” This is politico-speak for: “Do we smell a rat here?” Das Handelsblatt has more details.
The increasingly active GM BOD (Chairman Edward Whitacre Jr. is even to star in a TV commercial, usually not the job of a Chairman) convened, canned the CFO Ray Young and did the unthinkable: They came to a conclusion about (their version of) the fate of Opel. Nothing is clear at the moment, but indications are it may be Magna after all.
GM is stepping up efforts to retain some control over Opel this week, as political pressure builds to find a solution before German elections on September 27. GM sources told the Wall Street Journal that Spain, Britain and Poland would jointly contribute “about €1B” towards repaying a German government bridge loan. Should the nationalized American automaker pay off the note, they could then sell Opel to their “preferred” third party buyer option, RHJ. The private equity fund dug around in the couch and came up with another €25M, raising its offer to buy Opel from GM to €300M. Coincidence?
Germany’s Abwrackprämien powered sales rocket is entering its terminal phase. In August, Germany’s drivers bought 28.4 percent more cars than in August 2008, says the ever so reliable Kraftfahrt-Bundesamt (via Das Autohaus.) That is a tad less than July (+29.5 percent), and definitely not as hot as June’s +40.5 percent. After burning through €5B worth of Abwrack-fuel just as August had ended, the missile is on its way back to mother Earth. The crater it will create is expected to be spectacular.
Bye-buy cash for clunkers, German style: €5b ($7b) in government money has been gobbled up by Germans who exchanged their 9-years-or-older auto for something new. On Tuesday, there remained money for 16K cars; today, it’s all gone. At 10:14 am, the last application was processed. No more money in the kitty. The program is closed. Read More >
The GM Opel saga continues—at least until it doesn’t. Meanwhile, Spiegel is reporting that GM pressured the German government to separate the Russians (OAO Sberbank and automaker GAZ) from the Canadians (Magna) to make an Opel sale more palatable to its owners (the American government). Spiegel’s sources say Germany nixed the request; it had made promises to Russian President Dmitry Medvedev about the sanctity (if you want to call it that) of the deal. For those of you who want a little background on this international game of chess, the World Socialist Website has the 411.
After having had a look at the calendar, the German government appears to have written off any chances of solving the increasingly puzzling Opel mess before the national elections. (September 27). In an interview with theFrankfurter Allgemeine Zeitung, German Economy Minister Karl-Theodor zu Guttenberg said that Opel has enough money to last through January. Which is code for “don’t expect anything soon.” And he has an ace up his sleeve . . .
To boil it down to a single word, Sebring. GAZ’s main mass-market model is the Volga Siber, a Russian-market adaptation of the previous generation Chrysler Sebring/Dodge Stratus. As Der Spiegel points out, that’s not enough to go to war with even in the Russian market, and GAZ’s bosses want Opel to bring modernity to their products. GM is terrified about the prospect of having to compete against Opel in Russia, reports the AP. But those fears could be overblown. “Even if GM completely stops doing any research and doing any product development, maybe [GAZ is] going to catch up with them in five or ten years at the earliest,” says Serguei Netessine of the Wharton Business School. Just in case though, GM is investing in its Daewoo-based European Chevy lineup, according to Bloomberg. Meanwhile, the search for an Opel buyer has cost over $1 billion so far. And it’s only just starting to get properly nasty.
There’s some surprising news in Automotive News [sub] today in GM’s ongoing attempt to save Opel (and, more importantly, its intellectual property). Since the German Government shot down the only proposal that would keep Opel IP with GM, the General is scrambling to prevent its erstwhile German arm from falling to Magna and GAZ/Sberbank. But who on earth would give GM the $4 billion it needs (now) to keep Opel on board the mothership (for the moment)? Surely only the American taxpayers are that gullible! Unfortunately for GM, there’s a catch. Automotive News explains:
Because GM is barred from using funding from the U.S. government from its reorganization in bankruptcy to support its international operations, one of the options could include raising money by selling or mortgaging the automaker’s assets in China, one of the sources said.
The board of GM convened on Friday to finally decide Opel’s fate. The board did as expected: It did nothing. They left everybody hanging. The board decided to not decide anything.
According to Reuters, the GM board desperately needs critical information from the German government. To wit: What state financing would be available if GM would sell Opel to their darling RHJ International, and not to Magna, which is favored by Germany.
Excuse us?
Do we have a serious case of highly contagious ADD, which has befallen the complete GM board? We thought it had been made perfectly clear: Read More >
A BlueSport-based sub-Boxster? A “Roxster” Cute Ute based on the Tiguan? A Panamera coupe? VW CEO Martin Winterkorn’s interview with Manager Magazin is sure to make Porsche purists sweat. Sure, he says “a Porsche must remain a Porsche.” But how else does Winterkorn expect the Zuffenhausen boys to sell 150k units per year by 2012, let alone 200k by 2018? Just as a reminder, Porsche currently sells about 75k units per year, Cayennes and all. But, as Winterkorn modestly asks, “who plays the multi-brand game better than us?” Yikes!
Kick ’em when they are down: The district attorney of Stuttgart has initiated a probe against former Porsche CEO Wendelin Wiedeking and former CFO Holger Härter. This after Germany’s financial watchdog Bafin has filed a complaint against the two. They are under suspicion for market manipulation and illegal disclosure of insider information, Die Welt reports. Prosecutors raided the offices of Porsche and impounded files. Read More >
Having won the battle of the alpha males, Volkswagen now bares its fangs at two new enemies: Big Toyota, which Volkswagen wants to unseat from its #1 position; and moribund Opel, which VW would rather see dead than alive. VW CEO Winterkorn growled that VW might pull its parts business from Magna if the Canadian-owned partsmaker proceeds with their plan to acquire Opel. “We are looking with suspicion at what’s happening here,” Winterkorn said, according to the German edition of the Financial Times. Things are getting nasty, again . . .
On Friday, the last act of the ménage à trois between Volkswagen, Porsche and the Sheik of Qatar was consumated. After the supervisory boards of Porsche and Volkswagen had given their approving nods to Porsche becoming the tenth brand of Volkswagen, Sheik Hamad bin Dschassim bin Dschaber al-Thani signed on the dotted line and bought 10 percent of coveted voting shares in Porsche SE for his sovereign wealth fund Qatar Holding LLC. Qatar will also take over “most” (says Das Autohaus) of the options on VW stock. They paid €1b for a package of derivatives that gives Qatar access to a 17 percent stake in Volkswagen. As peace breaks out between Wolfsburg and Zuffenhausen, Volkswagen is set to attack a big enemy: Toyota. Read More >
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