TTAC’s B&B are a tough crowd. After we published that Germany, for the second month in a row, saw a sales increase of 40 percent over the same period in the prior year, a month-by-month accounting, complete with graphs was demanded. That request was fulfilled. Then, more demands.
New car registrations in Germany, Europe’s biggest auto market, went stratospheric by 40 percent in June. At record numbers, Germany’s Autofahrer junked their old cars, collected €2500 and bought a new one, says Reuters. This followed a May that also saw a 40 percent rise over the same month last year.
A month ago, we reported that GM offered to buy back Opel some day “when we do better after a restructuring phase.” Offered? GM downright demands the right to buy back Opel after a buyer has successfully resuscitated and restructured Opel.
The rumors of such a demand have been around for a while. GM is pretty much the only one on the planet who thinks this is a swell idea.
A few days ago, RHJ International, the Belgium-based industrial holding company interested in Opel, was moping. They said, apparently, they were not wanted anymore, were “kicked out of the bidding process.” GM and Germany were only talking Magna and maybe China’s BAIC. Guess who’s back in the game?
Porsche finally has a written offer from the Sheik of Qatar, if the Frankfurter Allgmeine‘s sources are not mistaken. It sounds pretty official: “We have a written offer of the Qatar Investment Authority which details their engagement in the Porsche Holding SE and their purchase of our options for Volkswagen stock,” said a Porsche spokesperson to the FAZ. Currently, the both sides are in the bargaining phase: How much or how little will they pay?
Over the weekend, Porsche complained loudly about a Monday ultimatum to accept Volkswagen’s merger proposal—or else. The answer from Wolfsburg: “Ultimatum? What ultimatum?”
“There is no ultimatum,” a VW spokesman told Reuters. He would not comment further.
Parallel worlds? Porsche Chairman Wolfgang Porsche and his deputy on the supervisory board, Uwe Hueck, said in a statement on Saturday they had been given an ultimatum by VW and Lower Saxony and that they would “not accept extortion.” Most likely explanation . . .
Rumors of a sub-Boxster Porsche roadster appear to be off again. “Another model line is not something we are concentrating on at the moment . . . my gut feeling is that we do not need one,” Porsche S&M boss Klaus Berning tells the Telegraph (via MotorAuthority). Rumors had centered around VW’s Bluesport roadster concept, which is likely to go into production as both VW and Audi-branded sports cars. That could have spelled a brutal brand dilution for Porsche, but independent development isn’t exactly a great option either, considering Porsche’s tenuous financial status. Weirdly, Berning does admit that it “could be possible to have a four-cylinder again in a 911 but it would be a Porsche four-cylinder. The 911 is the core of the brand and it follows different rules to the rest of the brand models.”
Update: According to the speaker of the influential CDU Economics Council, there will be no decision about the future of Opel before the 27 September national elections. “Nothing will be decided before the elections, because nobody in the government wants to lose face because of this,” a council member said to Automobilwoche [sub]. The Opel Trustee figures that the latest date for a final, signed contract is mid September. If nothing is signed by then, the government money has run out and Opel is bankrupt.
The GM/Opel/Magna/Sberbank/GAZ group grope is in trouble. The writings are on all walls.
Opel is hemorrhaging more than €5 million per day, the Westdeutsche Allgemeine has learned. Opel spokesfolk said, it’s “only” €2.8 million. By mid September, the €1.5 billion bridge loan, underwritten by the German government, will be used up. There won’t be more money—that has been made as clear as can be. Time and money are running out. Why is Opel burning so much cash despite brisk sales? The Opel Tech Center has 7000 highly paid engineers. They work(ed) for all of GM. Bankrupt GM stopped all payments.
In the meantime, talks between GM and Magna hit one snag after another.
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While Porsche has problems consummating the Volkswagen takeover, Volkswagen covets a smaller, but possibly juicy target: Suzuki. The German Manager Magazine has it on good authority that VW wants to get cozy with the Japanese maker of small cars. Buying, say, 10 percent of Suzuki would not be out of the question. Ulrich Hackenberg, head of VW’s R&D, had been in Hamamatsu, Japan. He came back impressed. “We are still in the sniff phase,” said a VW exec to Manager Magazine, no serious negotiations are being held—yet. Ferdinand Piech had praised Suzuki in May. Not that VW needs help building small cars. But they could need help where Suzuki is the market leader: In India, next to China the most promising growth market on the planet. Suzuki had a partnership with GM, but last year, all GM shares in Suzuki were turned into cash, so the coast is clear.
In the left corner: One of the world’s top heavyweights. European Champion. Number two in the world league. In the right corner: A flyweight contender. Ranks at the bottom of the list. The guy in the right corner wants to knock out the one in the left. He surprised him, scored some hits. Now the big guy on the left is starting to get going.
The guy on the left just won a very rare trophy: Volkswagen’s chief financial officer Hans Dieter Poetsch said to Reuters that Volkswagen will have a “positive result” in the second quarter. As for 2009, Poetsch added that VW is also on track to having a “positive result for the full year.” A car maker that turns a profit?
Imagine: You head down to your friendly AutoZone or Pep Boys. While you shop for the latest “guaranteed 10 horses more” K&N filter, and the Manager’s Special floormats all the way from Ningbo, China, your incredulous eyes stare at a sign: “New cars at shocker prices! More than 30 brands! Up to 35 percent off!”
Representatives of China’s BAIC are on their way to Frankfurt, where they will pile in limos with the proper branding and go to nearby Rüsselsheim. There, they will receive entry to the inner sanctum of Opel: The due diligence room.
Opel will open wide and BAIC will be able to inspect books, trade secrets, business plans. The next step will be a binding offer, the Frankfurter Allgemeine Zeitung [sub] reports. In the coming weeks, BAIC Chairman Xu Heyi himself will land in Frankfurt and will present his plan to unions in Rüsselsheim and politicos in Berlin. Xu knows how to deal with the Germans. His company has a successful joint venture with Daimler.
Two items become apparent:
Snickers in Detroit, horrors in Rüsselsheim: Suddenly departed Government Motors purchasing chief Bo Andersson is taking a job in Russia. He will be Putin charge as chairman of Russian automaker Gorkovsky Avtomobilny Zavod, better known as hapless GAZ.
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The German government is sending strong signals to GM to move on the Opel deal with Magna — or else. Their message: “Get on with it, or Opel will be Chinese.”
You thought the Magna/Sberbank/Union/Russia/GM/Et/Al. deal is done? It’s not. Germany is still talking to potential investors, says Reuters.
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