Shock GM decision on Opel sale draws ire
Published: 04 November, 2009, 20:32
Edited: 09 November, 2009, 10:36
TAGS: Investment, Manufacturing, Russia and the global economy, Finance
The GM decision to back out of the planned sale of a 55% stake in Opel has sparked an angry response in Berlin and concern in Moscow, after months of negotiations went nowhere.
The German government is fuming, the Russian government is concerned but is unwilling to interfere, and the Magna-Sberbank consortium is thinking about legal action. So far it's the Germans shouting loudest and making threats to withdraw financial aid worth $7 billion. After months of pushing for the Magna-Sberbank joint venture and helping the parties seemingly reach agreement on everything from staff redundancies to intellectual property and the financing of the deal, German Economics and Technology Minister, Rainer Bruederle, wanted answers quickly on GM's about face.
“The behaviour of General Motors in regards to the employees at Opel is completely unacceptable; the behaviour of General Motors towards Germany is completely unacceptable. General Motors alone is responsible for this development; We will not be pressured by Opel and General Motors, and I fully expect them to present their forecasted restructuring plans as soon as possible.”
After months of protracted talks GM finally seemed to approve the sale of a 55% stake in Opel to the Russian-Canadian consortium in September. Magna was going to invest €700 million into the carmaker. While, Russia promised to save jobs and add production at a plant in Central Russia. The acquisition of a dealer network along with engineering facilities was meant to be a giant leap into the future for Russia’s ailing car industry. This may have been a the main reason GM changed its mind according to Igor Morzharetto, auto analyst for Za Rulyom Magazine .
“It was clear from the very beginning that there was too much fuss around this deal. First an agreement should have been made, but there were only letters of intent. Russia scared off both the Germans and Americans by saying that the production will be moved to Russia. By mid summer it was obvious that GM was not eager to move any technology to Russia and that GM would retain a 35% stake and decision-making rights and patent.”
GM's decision to keep Opel, and restructure the business itself, comes just as American and European car sales are showing signs of improvement.. Opel still owes Germany €900 million in loans, but GM says it will pay it back in November. Half of Opel’s 50 thousand employees are based in Germany. Fearing for their jobs if they remain part of GM, workers are already planning strikes to try to force the American parent company into a rethink.
04.11.2009, 08:33
2 comments
GM U-turn leaves Sberbank Magna Opel plans on road to nowhereAfter a 6 hour board meeting, General Motors has walked away from the planned sale of a majority stakeholding in its German arm, Opel, to the Magna Sberbank joint venture it reached final agreement with just weeks ago. |
05.11.2009, 10:36
1 comment
Government holds to conservative GDP outlook while economists see upsideRussia's government is predicting a modest 2% GDP growth next year. But many independent economists say the figure could actually be more than double that. |
Government Motors? That was good! Both GrizlyBear and Bianka are right. Americans themselves are idiots and they built their "supperior" technology by paying foreign scientists with Jews' money... This trick of GM was ordered by "good" "chairman" Obama to block the Russians. But this won't avail them, they only succeded to be hated by the Germans. Every unemployed German knows who's responsble for their plight: the American government. With some luck we will have anti-American riots in Germany! SVR will not need to move a single finger... And of course finally Opel will pass to Russians. It will be a double victory of Russia and Germany will be in a track to alliance with Russia. It will be the first step to the dissolution of NAziTO.
MCChurch is a very funny guy since he is linking political issues with business, a western rhetoric of a Cold War stereotypes, and is indifferent about Goldman Sacks and JP Morgan financiers of GM whom are treating 10.000 Opel employees across Europe as 10.000 sacrificial lambs who will lose their jobs just to punish Russia?!? What a Christmas present for those poor families. Western countries have found a solution to keep Opel going, including Germany, but the above mentioned banks are doing more damage to western countries than Russia. What are you talking about Gringo?
This latest "clown act" from GM causes concern on this side of the globe, too. I don't know exactly how this "no sale" is viewed by Canadians, since their gov't. poured money into a "new GM"; however, part of the bailout promise was that GM sell OPEL. GM can't use USA bailout money to pay back the Germans...it's against the terms of the "bailout from the USA". GM's Board makes no sense: i.e. they get the bailout on the condition they sell OPEL; they then don't sell OPEL; then cite that it's the "new Board members from the Obama administration" that changed the deal. Wait...Obama said sell OPEL...? A corporation in the USA has a "charter" granted by the state to do business "for the benefit of the state". The GM Board has forgotten that aspect of "doing business" for a long time. Look at Detroit. "Technology" aside for a minute...GM is displaying a huge lack of conscience by not making products available in a free market and trying to pin a boycott on the Obama administration as well as a low blow to Germany.