As the flagship Insignia sedan celebrates its first birthday, Opel's future remains murky.
When we last left our beleaguered European auto company, Adam Opel, the German Chancellor had politicized the proposed sale by calling for General Motors Company to sell its loss-making European subsidiary to a Russian backed consortium headed by Magna International.
The other finalist in the bidding, Belgian based private equity firm RHJ International, was not favored by the German government since it thinks massive job losses will result.
Since the government is facing national elections at the end of this month, and is under attack for its economic policies, it is not surprising that the government is playing for votes by trying to force the Magna deal on GM, which is favored by Opel’s labor unions.
In it’s latest, and thus far ineffective, attempt to force such a sale, the German government said this morning it would call the €1.5 billion bridge financing loan in November that is keeping Opel afloat, and it would not advance another €3 billion already promised if the sale didn’t go to Magna.
German Finance Minister Peer Steinbrueck said in an interview published in the Frankfurter Allgemeine Zeitung that “the 1.5 billion Euros in bridging aid are a loan. And a loan is a loan.”
A GM Europe spokesperson responded that the terms of the loan do not require the sale of Opel.
The General Motors board, which is meeting today, has at least four options regarding Opel, which has not made money in a decade: shut it down; keep it even though $5 billion invested thus far has not turned Opel around; sell it to Magna/Sberbank; sell it to RHJ International.
A fifth option, the sudden appearance of another bidder, is about as unlikely as the Detroit Lions football team having a winning season, after last year’s 0-16 performance.
The RHJ bid is attractive to GM since it retains a larger share of the company, which is responsible for much of its product development in small to mid-size vehicles, said to be the only growth segments in much of the world. GM is now a larger, and arguably a more successful company, outside of the U.S.
RHJ also allows the possibility for GM to take back majority control of Opel. As TDB has reported, the RHJI bid is a cleaner two-party deal.
G.M should not be goaded into blackmail by merkel, or the german government as most do think that GM willclimb back out of the brink, germany is just trying to secure its work force and not looking at the bigger picture in getting rid of loss making car plants even if that meant the uk, but vauxhall has never made a loss as germany has, a lot due to the huge pay they get