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 . . .
On the dot at 6 p.m., Magna’s bid came in, reports the German Rheinische Post. Not all too surprising, it was a joint bid with the Russian auto maker GAZ, backed by the also-Russian Sberbank. GM finally confirmed receipt of three bids: Ripplewood had also handed in theirs. Nobody really knows, or cares, when Ripplewood handed in their papers. It was the Magna bid Berlin didn’t want to be without.
While officially GM has to approve the buyer, the real decision makers are in Germany’s government. They hold the purse strings of the loans any bidder will need. Berlin will decide by the end of this coming week—just in time for the impending bankruptcy of the mother ship GM. Tick-tock.
Herr Schmitt,
Didn’t the UK government offer to stump up some loan guarantees as well because of the 2 Vauxhall plants in the UK? Surely, they should be allowed to have a say? Or could this be an example of the UK government “trusting German judgement”? Also, I wouldn’t be surprised if the UK stump up some money, but still see some factories close in the UK!
Off topic: While I applaud German punctuality (my brother lived in Germany for a while during a harsh winter and he said “no matter how many blizzards, winds and rain storms there were, if a train or bus said it due at 14:36, it’ll come at 14:36.”) German reliability is laughable. I used to work for a German auto supplier and the German head office and technical staff used to tell the UK side to cut corners and use cheaper materials. It was the UK side who continually resisted these efforts in the name of quality and reliability. I never thought I’d see the day when the British lecturing the Germans on quality and reliability!
Frau Puckrik:
Just reporting the news. Nobody is saying anything about a UK government involvement, although occasionally, the name “Vauxhall” is being dropped.
As for German punctuality, it has become a myth. Trains run notoriously late, to some degree caused by people who step in front of one to end their life that way.
German reliability – I worked for VW for too long, and I’m taking the 5th on that.
Incidentally, why is the German government favouring Magna over FIAT? Is it purely because Magna are less likely to close German factories? Or is it because it’s more palatable to have a pseudo-German company take Opel on rather than the Italians?
If they close UK factories, then, I suppose I can write the Vauxhall Astra off my list of cars which I’ll buy. If the car isn’t assembled in the UK, I’m not interested.
Trains run notoriously late . . .
I concur. When I was in Germany, the ICE from Wuppertal to Köln was a few minutes late and the night train from Köln to Vienna arrived over an hour after its scheduled time. However, the Wuppertal monorail was on time; but they should tell tourists that they have to get off at the turnaround point.
Frau Puckrik:
The German government officially favors nobody, fair and equal treatment is being had by all. (And the check is in the mail …) However, Berlin says that the new investor also has to win a beauty contest with the unions AND the dealers. The unions definitely favor Magna because Magna promised not to close any factories in the backyard of the German unions. The Opel dealers also favor Magna. No official reason given, they just don’t seem to like Fiat. Officially, the Opel dealers voiced “doubts about a viability of a Fiat engagement.”
If I was British, I’d especially favor Magna over FIAT, since the Italians said that they would close 10 factories Europe wide after the merger and they also promised that none of those would be in Germany (or possibly the one in Kaiserslautern…reports aren’t conclusive about that).
Magna on the other hand want to even pump up the volume by becoming more dominant in Russia through GAZ channels and by producing cars for other companies…apparently there have already been talks with Peugeot and Ford.
@tom
As long as no British jobs are lost or UK factories are closed, I don’t care where Magna or FIAT make their cutbacks.
Though this will be interesting as not getting Vauxhall-Opel will put a crimp in Mr Marchionne’s world domination plans. If he doesn’t get Vauxhall-Opel, then his empire will consist of a small European car maker and a bankrupt North American car maker.
He could still make a success of it, but it’ll involve a lot of work for him. Hopefully, Chpater 11 will rid Chrysler of the dealers and union contracts which hinder Chrysler. As for dodgy products, well, that’s something which only Mr Marchionne can fix….
@Herr Scmitt,
I notice that Magna is being favoured (officialy or unofficially) because of its pledge not to close German factories. Which doesn’t bode well for other European factories.
Do you believe this to be the case?
I personally believe that GM Europe had way too much excess capacity. It could easily lose the Belgium plant and no-one would notice.
Though this will be interesting as not getting Vauxhall-Opel will put a crimp in Mr Marchionne’s world domination plans. If he doesn’t get Vauxhall-Opel, then his empire will consist of a small European car maker and a bankrupt North American car maker.
Yes, but if he does get Opel, he’ll also have a bankrupt European automaker. One that has no clearly defined IP. His plan to become a world leading automaker doesn’t look good in either case.
I too want the UK plants to survive, but we all know that it’s far easier to close a UK factory than one in Germany (unions), Belgium (worker occupations) or Italy (riots). I fear that Luton and Elsemere Port could be toast especially as the govt (or any UK govt) is totally useless when it comes to industrial policy. And after bailing out the banks, they just don’t have the money to help anyone else.
So it’s okay if they close the Belgium plant but none of the UK plants? I’m sure the good folks working in Belgium would tend to disagree. Regardless, Opel/Vauxhaul will need to reorganize and yes, make painful cutbacks…just like the rest of the automotive industry. The NIMBY attitude of plant closures, if allowed to rule the decision-making, will cripple any real efforts to streamline capacities in order to maintain viability.
Threer,
The UK is GM’s largest European market, it would be unwise to annoy it by closing its manufacturing facilities, especially when it has made all the concessions GM asked of it.
And given that the euro is at an all time high against the pound it would even more stupid to close the UK plants, which protect the UK market against currency fluctuations.
In the meantime, Belgium was slated for closure until they started striking. So Belgium may not agree that it should be closed, but GM management certainly did.
I’m with Katie. The Belgians need to step up to the plate and take a hit (in the crotch) for the Opel/Vauxhall team.
Perhaps if the New Opel says “close British plants” the uproar will be large enough in the UK tabloid press to change their minds. Certainly, I can see a LOT of Brits saying “NSFW those B*stards” and pulling Opel (badged as Vauxhall) and even Chevrolet (merely badged Daewoos) off their new car shopping lists.
Even more catastrophic, given the number of private sales vs. “company car sales” would be if the company car buyers essentially refused to buy Vauxhall badged Opels….
What are the figures? 80% of new cars sold in the UK are “company cars” given as perks?
Opel closes their two British plants at their own idiotic peril.
I like the Lego characters… =)
I don’t think Fiat will get it. As for why they’re “rejected” I guess it has to do loosely on the fact germans know Iveco… and pretty well: Magirus and some other turck makers were purchased long ago by Fiat.
Fiat may be able to get the LAAM branch of GM, which would give them still a big market, but not much in terms of product R&D. It would consolidate them as Nº1 in Brazil, Venezuela and some other markers down here.
I’m more interested in what’s going to happen with Holden. Sounds like they’re completely in the dark, and scared now that the G8 is going away.