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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 walk2k on 5/28/2009 6:19:18 PM , Rating: 0
They don't "design" them to fail, they just suck realllly bad at making cars. If Honda/Toyota all broke down at 150k they would commit hari-kari lol!

*wave* US autos, door, ass etc!!


RE: That's what you get...
By Atheist Icon on 5/28/2009 8:15:08 PM , Rating: 2
Toyota was smart with the mechanically ignorant American public. They designed their motors to run with a non-interference design. So if some did not properly maintain their vehicle and the timing belt broke, the piston would not ram full speed into the valves.

On the other hand the big 3, big 1 now, decided against that, feeling the American public was smarter than that. Look where it got them.


RE: That's what you get...
By matt0401 on 5/29/2009 12:55:43 AM , Rating: 2
So Business 101 is basically to assume your buying public is retarded?

I'll keep that in mind. I'm heading into business at uni next year. :)


RE: That's what you get...
By Atheist Icon on 5/29/2009 8:57:52 AM , Rating: 3
quote:
So Business 101 is basically to assume your buying public is retarded?


Ahh, yes. Otherwise there wouldn't be warning labels on Hair Dryers telling you not to take them into the bath tub, that you shouldn't put metal in the Microwave, that touching exposed wires in your house that are live could kill you, small toys are choking hazards to young ones, starbursts should be eaten with care, mcdonalds coffee is hot, do not ingest superglue, etc, etc.

Considering that, it's not surprising that unless the buying public is explicitly told how to/not to do something, it's the companies fault selling the product.


RE: That's what you get...
By thepenguin99 on 5/29/2009 12:58:20 AM , Rating: 2
quote:
Toyota was smart with the mechanically ignorant American public. They designed their motors to run with a non-interference design. So if some did not properly maintain their vehicle and the timing belt broke, the piston would not ram full speed into the valves.


Ok, stop the terrible information please. Toyota has made non-interference engines but they also make interference engines just like every other car company. As an example the 22R family, one of the better known toyota engines, is an interference engine. Toyota and Honda are dominating the US automakers because they quite simply made better cars overall for the last 30 years than any of the US companies. That seems to be changing though (with the possible exception of Chrysler) so hopefully the big 3 can compete.


RE: That's what you get...
By Atheist Icon on 5/29/2009 8:42:16 AM , Rating: 2
quote:
Ok, stop the terrible information please. Toyota has made non-interference engines but they also make interference engines just like every other car company. As an example the 22R family, one of the better known toyota engines, is an interference engine.


True, but it didn't hurt toyota image to initially build their motors in the non-interference manner.

quote:
Toyota and Honda are dominating the US automakers because they quite simply made better cars overall for the last 30 years than any of the US companies.


They are dominating, true.

quote:
That seems to be changing though (with the possible exception of Chrysler) so hopefully the big 3 can compete.


We need to change it to Ford, instead of the Big 3. The Government cannot run a business, let alone an automotive business. As long as the Government is running GM and Chrysler, I will not buy a single car from them. GM and Chrysler will never be competitive until they shed the Government.


"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone














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