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Posts Tagged ‘opel auto bailout’

Daimler AG Head Pans Government Help for Opel

However, Dieter Zetsche thinks aid for Chrysler is just fine.

by on Apr.08, 2009


Dr. Zetsche is trying to have it both ways on government aid to auto companies.

The German government should not offer Opel, the heart of General Motors’ European operations, any special aid, according to Daimler AG Chief Executive Officer Dieter Zetsche. He made this assertion at the company’s shareholders’ meeting in Berlin. Not only is it surprising that Zetsche would wade into this political quagmire, but the patent hypocrisy of his position is clear, where he endorses government aid to help Chrysler avoid bankruptcy, thereby cutting Daimler’s exposure of more than $1 billion in liabilities at the same time as he accepts German government aid for Mercedes-Benz.

Zetsche also admitted that governments are facing the full brunt of a global economic crisis.

“Just think about how quickly the most pro-market governments have moved to partially nationalize their country’s banking system in order to prevent a total meltdown of the global financial system,” Zetsche said.  

“I emphatically approve of the decisive action taken by political leaders. After all, extraordinary circumstances call for extraordinary measures and governments simply have to step in when a crisis threatens the very foundation of our free-market system,” he said.

clickherebutton In fact, Daimler is using short-week benefits provided by the German government to reduce bloated inventories at a critical time. In addition, it is asking its 20 unions for $2.6 billion in concessions. Other German automakers, Volkswagen AG and BMW, are certain to follow suit if Daimler is successful, which is considered likely. Indeed, unions at Opel AG have already begun offering concessions in an effort to avert the historic demise of GM Europe. (more…)

Auditors Have “Substantial Doubts” About GM

Is the empire ready to crumble?

by on Mar.05, 2009

GM auditor's "substantial doubts" could raise further opposition to federal bailout.

GM auditor's "substantial doubts" could raise further opposition to federal bailout.

Are there simply too many cracks in the foundation for General Motors to survive? There’s clearly more reason to doubt the company’s viability, today, in the wake of a gloomy report from the company’s own auditors, which raises “substantial doubt” about GM’s ability to remain in business.

That is, of course, no surprise to GM’s many critics, including those who have actively worked to try to prevent the Obama Administration from approving $16.6 billion in additional assistance, on top of the $13.4 billion the automaker has already received in emergency loans.

The latest concerns, raised by the auditing firm, Deloitte & Touche LLP, certainly won’t help. The irony is that the questions are being raised in GM’s own annual report. Deloitte serves as GM’s auditors, and its analysis and guidance is a central part of the yearly statement, which is filed with the Securities and Exchange Commission and supplied to investors. To be fair, in the current global meltdown and credit crunch there are doubts about the viability of many automakers.

Last year, GM ran up $30.8 billion in losses, bringing to $82 billion the total red ink for the past three years. According to its auditors, the company’s losses, and its inability to raise more cash in the continuing – and potentially worsening – economic crisis translates into a “substantial doubt” about GM’s ability to remain a viable concern.

“There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn,” the company’s statement said.