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Posts Tagged ‘opel bankruptcy’

German Government Nixes Opel Funding

Without other sources of money, U.S. taxpayers will continue to underwrite German jobs. GM is in a difficult political position.

by on Jun.11, 2010

Bruederle said he was convinced that GM has "sufficient funds" to restructure.

The German central government has rejected Opel’s application for loan guarantees, in spite of the fact that €8.5 billion was given to other automakers last year in the European Union to help them get through tough economic times. Opel received nothing.

Opel is currently surviving the ongoing Great Recession and the subsequent collapse of  auto markets only because of the largesse of U.S. and Canadian taxpayers who bailed out parent General Motors. This puts GM in a difficult political position on both sides of the Atlantic ocean.  And the European market forecast is grim. Most think this year it will be in the 14 to 15 million unit range, down from 15.9 million in 2009.

In the latest development of the ongoing saga, Opel was caught in a squabble that has weakened the coalition government of Chancellor Angela Merkel. German Economic Minister Rainer Bruederle denied GM €1.1 billion (~$1.2 billion) in loan guarantees after six months of work by General Motors on an Opel restructuring that obtained plant closings and other concessions from labor unions. Opel estimates it needs €3.3 billion, but some estimates are higher, including one from the UK government at €3.7 billion. Others are higher still.

Astute Opinion!

Bruederle is a Free Democrat, the minority party in Merkel’s fragile government, which came about after voters – read taxpayers – turned out some of her ruling party’s among other members in the election last September in the midst of the Opel bailout negotiations. Merkel had supported a takeover by Magna, but the GM board rejected that last November, in an unexpected move that was an embarrassment to Germany’s ruling party. (See Strategic Risk for GM was too high to Sell Opel) (more…)

Opel Bailout, Sale, Threatened by Fiat Boycott

Italian maker, one of three bidders, refusing to attend talks.

by on May.29, 2009

Fiat CEO Sergio Marchionne boycotts meeting with senior German leaders over the sale of Opel.

Fiat CEO Sergio Marchionne boycotts meeting with senior German leaders over the sale of Opel.

The increasingly complicated effort to save General Motors’ German-based Opel subsidiary ran into yet another snag, today, when Fiat, one of the two remaining bidders hoping to acquire a controlling chunk of Opel, decided to boycott a bailout meeting, in Berlin.

The Italian maker’s move comes barely a day after German government officials ignored their own deadline and refused to complete work on a $2 billion bridge loan package Opel says it needs if it hopes to continue operating long enough to complete a sale.

The Friday meeting was supposed to bring together representatives from the two bidders, Fiat and Canadian mega-supplier Magna International, as well as GM executives and officials from both the German and U.S. governments.

Subscribe to TheDetroitBureau.comBut a spokesman for German Chancellor Angela Merkel now says such a high-level meeting will only take place if, “those involved … have something substantial to produce, contracts that carry their signatures.”  Without Fiat’s involvement, that appears unlikely. (more…)