Forget Jack Baruth and his girlie Boxster. The whole Porsche company is quickly skidding out of control. Porsche, the company that supposedly has more money than Scrooge McDuck, the company where CEO Wendelin Wiedeking and his CFO Holger Härter supposedly take a daily dive into the money, was—hold on to anything stable—facing insolvency two months ago. This is what readers of the German magazine Der Spiegel will read on Monday. The Süddeutsche Zeitung has an advance copy.
Top German government officials, including Chancellor Angela Merkel and Hesse leader Roland Koch, are due to meet later on Friday in Berlin to discuss the bids placed for Opel on Wednesday. A decision is not expected before the end of the month. “Running Mouth” Koch couldn’t wait and is already giving odds.
“There is a ranking in which the offer from Magna is closest to the hopes and wishes of many in the German political arena but also the workers,” Koch told the Deutschlandfunk radio station. And the other bidders?
High suspense in the bidding for Opel. On Wednesday evening at 6 p.m., the deadline for bids had run out. However, only one bid—by Fiat—was in. But where was Magna? Minutes before the clock struck 6—or 18:00 in Berlin—the German government declared a stay of, well, execution.Then, finally . . .
Wednesday, May 20th 2009. Final deadline for anybody who’s seriously interested in taking over Opel. Today, concrete and final plans and bids must be presented to GM and the German government in Berlin. Today, Chancellor Angela Merkel, Vice Chancellor Frank-Walter Steinmeier, Economy Minister Guttenberg, Finance Minister Peer Steinbrück und Minister of Labor Olaf Scholz are meeting in Berlin to decide next steps, Automobilwoche [sub] writes. GM emissaries from Detroit are also standing by in Berlin to check the bids, Handelsblatt learned.
A bridge loan, estimated at €2 billion, has already been arranged. Condition: There needs to be a viable partner, and GM needs to agree to the German trustee model, which hasn’t been met with a lot of applause in Detroit. But they are running out of time and money at RenCen. When GM goes bankrupt by the end of the month, and no Opel deal is closed, all bets are off. Only two bidders seem to stand a chance in Berlin:
The Porsche/Piech family feud has reached high politics and the gutter—which, according to some views, is about the same. Chancellor Angela Merkel opened the “hot phase” of the (European, ho-hum) elections, notably in Wolfsburg, seat of Volkswagen.
She was flanked by Christian Wulff, premier of Lower Saxony, owner of 20 percent of Volkswagen. Also there—unusual for a campaign rally—VW CEO Martin Winterkorn, and VW’s workers’ council chief, Bernd Osterloh. A show of unwavering unity, a signal to Stuttgart. Their contribution to the election that sends representatives to Brussels? A salvo in the direction of Brussels: “We are fighting for a Europe that doesn’t interfere with all decisions,” said the Chancelloresse. “One of these sacrosanct decisions is the VW-Law.” The very law that keeps Lower-Saxony in the driver seat of VW and keeps the riff-raff from Stuttgart from taking control of Volkswagen. Premier Wulff said it more clearly: “The sole dominance of VW by Porsche has failed.” And it’s getting steamier . . .
Today, the supervisory board of Porsche has a sit-down in their super-secret R&D center in Weissach near Stuttgart. On the agenda: “How do we get out of this mess?” The meeting might not be very constructive. The board is heavy with members of both sides of the feuding Porsche and Piech clan. Ferdinand Piech himself will be there, along with Uwe Hück, head of the Porsche workers council. Last week, the former professional Thai boxer Hück had threatened he would report Piech to the authorities, on grounds of yet to be specified violations of securities laws. Only fools make idle threats to Piech.
Just got off the phone with my copyright lawyer. “Bertel, how many times do I have to tell you that ideas are not copyrightable.” “Yes, Sidney, I know, only the expression. But it’s a shame nonetheless.” There goes my last chance to get rich. What happened?
According to the pistonheads at Pistonheads.com, history goes into high RPMs again at Volkswagen. Due to the impending merger of Volkswagen and Porsche (which more and more looks like a takeover of Porsche by Piech) the company might need a new name. After all, Volkswagen-Porsche would sound unwieldy and would bring up memories of the ill-fated Volksporsche 914. Anyway, a holding company shouldn’t carry the name of one of its brands in its name (save for Ford, or Toyota, and many others.) The names of two brands in the name of one holding would be a bit too much. So someone floated a bright idea:
In California, weary road warriors who need a place to temporarily rest have few options if they’re traveling outside the reaches of its sprawling cities. The drive between the capital and L.A. is especially dreary: miles and miles of industrial farms, oleander and eucalyptus trees. Worse, rest stops are barely-maintained, glorified pit toilets. You’ll never forget the stench of an I-5 rest stop toilet hut.
In German politics or the corporate world, the secret weapon to destroy any progress is the feared “12 point program.” Any similarities to a 12-step program of substance abusers are purely coincidental. Since there is no way that all 12 points will ever be met, the project languishes and dies on its own with nobody having killed it.
The German government has increased the mega-tonnage of its secret weapon and presented Fiat’s Marchionne with a 14-point program as he visited Berlin on Monday to meet government and union officials. His intent: Secure political (and financial) backing by the end of this month for a dream. Marchionne wants to combine Fiat, Chrysler and Opel/Vauxhall to a car group that cranks out more than 7 million units a year and has combined revenues in excess of $100 billion. Second to Toyota. Bigger than Volkswagen. (That should make the plan popular in Germany.) Not so fast:
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Now that the no-money Fiatsco is (sort of) done and in the hands of the courts and armies of lawyers (what a reassuring thought), Fiat is fixing the sights of its lupara [see pic above] on another target that carries the ripe fruit of billions of government money: Opel.
“Now we have to concentrate on Opel,” Sergio Marchionne said in an interview with La Stampa. “They are our ideal partners.” (Reassuring thought #2: Chrysler must then be less than ideal . . . .) Reuters reports that “Marchionne coughed throughout the interview and admitted to being tired after months of talks leading up to the Chrysler deal,” giving rise to suspicion that Marchionne had contracted swine flu—an inherent risk when rolling with the pigs. Or it could be something worse than what a dose of Tamiflu could heal:
Meanwhile, in Europe, Chrysler gets a yawn, but all eyes are on Opel. Who, when, with whom? Fiat’s entreaties received a loud “NEIN!” from all colors of the German spectrum. The current darling appears to be Magna: Closer to home, Austrian, just like Porsche, not Chinese, politically well-connected.
The Austrian-Canadian car parts maker and contract manufacturer Magna has presented a “rough outline of a rival offer to seize control of General Motors’ Opel unit ahead of Italy’s Fiat” to German Economy Minister Karl-Theodor zu Guttenberg, Reuters reports. Fiat and Magna had a sit-down with the Minister. After the meeting, Guttenberg said Magna’s concept was “interesting.” He then pulled out a broken record and announced that the German government needs more facts and figures from GM. They’ve been saying this for months, and apparently feel ignored. Guttenberg said this wait “is tiring.” Further in the rope-a-dope dept., the US government also owes Germany some facts and figures. Once in hand, Guttenberg would then be ready “to think about loan guarantees.”
Ever the politician, Guttenberg said the concepts from Magna and Fiat were very different from each other, but were the most substantial plans he had seen so far from potential investors.
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Ah, the suspense of a spaghetti western: Chrysler Vice Chairman Jim Press and sales chief Steve Landry told U.S. dealers on a conference call to hold their breath until they turn blue because “the automaker expected talks aimed at clinching an alliance with Italy’s Fiat to run all the way to an April 30 government-imposed deadline,” says Reuters.
In the meantime, Fiat’s bid for Opel is running into a phalanx of counter-fire and looks deader by the minute. According to Das Autohaus, the powerful metal workers union is “strictly against” Fiat. Also the Opel dealers are not enthused: “We want a strong partner for Opel, and that’s not Fiat” said Thomas Bieling of the Opel Dealer Council. Opel Supervisory board member Schild has compared Opel and Fiat to “two sick parents” who would not create a viable ensemble.
Until a few weeks ago, Porsche’s Wiedeking and his CFO, Holger Härter, were feted as the masters of the universe and Jesus Christ rolled into two. After pulling off the impossible feat of showing more profits than sales twice in a row, the two were said to be able of walking on water while turning it in to wine. Now, they are busy updating their résumés. Or maybe even their last wills.
And the deals, they keep on coming. Bloomberg reports that the Porsche and Piech families “plan to sell their main car assets to Volkswagen AG under a plan that would tighten Porsche SE’s grip on Europe’s biggest automaker.” Hold it right there: Haven’t they just BOUGHT Volkswagen? Are we confused yet? This is how it works:
Fiat wants to get its hands on Opel, and the Opel workers don’t like it at all. Opel workers council chief Klaus Franz confirmed today that Fiat is in intensive negotiations to take over Opel. A memorandum of understanding may be signed as early as this coming Tuesday, reports Automobilwoche [sub]. Franz is very much against it:
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