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  (Source: Opel Insignia OPC Sports Tourer )

Opel Ampera (Chevrolet Volt twin)
Germany and the U.S. government's failure to reach a deal could devastate GM spin-off Opel

With General Motors hanging on the verge of bankruptcy, one nation which may be critically affected is Germany.  Home to Opel Motors, a huge GM European subsidiary, the nation has much to lose if a deal to spin off Opel and separate it from the troubled GM fails.  However, despite strong interest between top potential bidders -- Canadian parts supplier Magna and Italian automaker (and partial owner of Chrysler) Fiat -- the window to cut a deal is fast closing.

German Foreign Minister Frank-Walter Steinmeier is meeting with Secretary of State Hillary Clinton in an emergency session after 12 hour talks between Germany and the U.S. concluded with no deal.  Germany blames GM and the U.S. Treasury for souring talks.  The talks saw Germany seeking to shield Opel from a GM bankruptcy, making it a more viable takeover target, but it found that GM and the U.S. aren't very willing to do that.  Mr. Steinmeier still has hope for a deal, stating, "[I will] urgently ask that attention is directed at Opel in the coming hours."

Meanwhile GM heads towards a likely bankruptcy on June 1, despite an eleventh hour deal with bondholders.  The success came after last minute moves by the U.S. Treasury to sweeten the deal for bondholders.  In addition to allowing them to both trade their $27B USD in bonds for a 10 percent stake in the company, it allowed them the chance to buy 15 percent of GM's stock at a greatly discounted price -- the extra incentive is what won them over. 

However, the Treasury Department believes GM's problems are too hard to solve outside bankruptcy.  The Treasury Department also believes that it must take ownership of the company to solve its problems -- it will have a 72 majority percent stake in the company, post-bankruptcy, in exchange for the bailout loans and the money it will spend on the bankruptcy. 

The bankruptcy will be the largest industrial bankruptcy in the nation's history.

Unlike GM in the U.S., its European holdings -- Opel and Vauxhall -- are slight more solvent, with enough liquidity to continue operations through the fall.  Germany hopes that a deal will remove Opel from GM during bankruptcy.  If it succeeds Opel may fetch a handsome price. 

Magna Chairman Frank Stronach poured fuel on a potential bidding war fire, saying his company had significantly boosted the amount of capital it was able to offer for an acquisition.  A 300M € ($418.3M USD) offer by Magna was already rejected.  Still, Magna is considered the leading candidate, though Fiat remains in serious contention.  A dark horse is China's Beijing Automotive Industry Corp, which made an offer, which was rejected as too vague.  It could return at any time with a more concrete offer if it desires.

Opel employs 25,000 Germans.  GM (U.S.) employs about 90,000 and recently gave its U.S. employees an early paycheck in preparation for the uncertainty of bankruptcy.



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RE: That's what you get...
By StevoLincolnite on 5/28/2009 2:04:11 PM , Rating: 2
I haven't ever had an issue with my Holden Commodore VN, which is 20 years old, done 350,000 km's on the clock, and still has much of the original engine parts, like Pumps, Idle Pully etc' from the day it was bought, except the alternator and coil pack, which was replaced with second hand ones. (I do all my services myself), The car has been reliable, and the old Buick V6 motor keeps on ticking.

Yet my Neighbor has a VX Commodore, factory fitted LPG, and it just LOVES to bend push-rods, thankfully I can pick up a push rod for only $5.

You win some, you loose some, for instance I have an old TV that's 20 years old, yet my other TV went on 3 years old and died. ~ they just don't mak'em like they used to!


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