GM decides not to sell Opel

[Schadenfroh]

http://www.reuters.com/article/newsOne/idUSTRE5A25RL20091104

DETROIT/FRANKFURT (Reuters) - General Motors reversed course on Tuesday by abandoning a long-expected sale of its Opel to a group led by Canadian auto supplier Magna and opting to keep the European unit after a year of uncertainty and high-stakes political negotiations.

I hope that this works out for the best, especially for the US and Canadian citizens on this board... since we are all shareholders. The drama about who should buy Opel has been a long one and I am a bit surprised by this play of events. I wonder if this is just GM trying to get more concessions out of the parties involved or if they really do plan to keep it?

 

[sandorski]

I thought the deal was done. :shrug;

 

[MikeMike]

They really plan to keep it...
Opel will provide small cars to Buick in NA and China
Buick in China will provide large cars to Buick NA
GM keeps a foothold in Europe
GM keeps one of their best luxury small car designers.
The whole automotive world is now happy because one of the main suppliers is not about to become their competitor as well.

 

[Red Irish]

I thought the deal was done. :shrug;

So did Germany.

 

[BeauJangles]

Why have we allowed GM to survive again?

 

[boomerang]

Why have we allowed GM to survive again?

Mmm, mmm, mmm, Bara.......

Oh, you know the rest.

 

[BeauJangles]

Mmm, mmm, mmm, Bara.......

Oh, you know the rest.

Though I've opposed most of the uses of bailout and stimulus money, the support of GM is something that baffles me. While Ford spent most of the early 2000s trying to fix it's problems, GM hasn't done squat and now the US government has basically said, "well, nice work Ford, but GM you get a pass on this one." That's not how business works. The global car market is shrinking, so we shouldn't be surprised that one or two car companies could go completely bust. Instead, we're artificially supporting a company that is already in serious financial trouble and, while I understand the 'need' or desire to save jobs, this money was slated to go elsewhere. I know a few people in federal law enforcement and in the CIA / FBI who are all running on shoestring budgets now. They cannot hire new people, they can't get promoted, and many are looking to get out. Sigh.

 

[lupi]

I though this deal was dead long time ago when the europe governments wouldn't bend over like the US did and give concessions/deals to them to push it through.

 

[PingSpike]

Maybe if we give them another couple bail outs they can open the Buick dealerships back up and buy Harley, then stop building motorcycles and start selling Harley Cobalts.

 

[Thump553]

Smart move. The so-called Canadian purchaser was more or less a front for Russian interests, GM was very leery of them getting its technical expertise. Also IMO Opel is one of the better, if not the best brand in the GM stable-they should work to get it profitable again.

The government of Germany will be up in arms about this change (unless the new prime minister changes course) so there are more dificulties ahead.

 

[Red Irish]

Smart move. The so-called Canadian purchaser was more or less a front for Russian interests, GM was very leery of them getting its technical expertise. Also IMO Opel is one of the better, if not the best brand in the GM stable-they should work to get it profitable again.

The government of Germany will be up in arms about this change (unless the new prime minister changes course) so there are more dificulties ahead.

I think Germany are up in arms about the fact that they have subsidised or paid advances to GM under the assumption that the sale was going to go ahead. They now want their money back.

 

[boomerang]

Though I've opposed most of the uses of bailout and stimulus money, the support of GM is something that baffles me. While Ford spent most of the early 2000s trying to fix it's problems, GM hasn't done squat and now the US government has basically said, "well, nice work Ford, but GM you get a pass on this one." That's not how business works. The global car market is shrinking, so we shouldn't be surprised that one or two car companies could go completely bust. Instead, we're artificially supporting a company that is already in serious financial trouble and, while I understand the 'need' or desire to save jobs, this money was slated to go elsewhere. I know a few people in federal law enforcement and in the CIA / FBI who are all running on shoestring budgets now. They cannot hire new people, they can't get promoted, and many are looking to get out. Sigh.

Regarding the law enforcement budget issues, it appears to me that the administration has more or less declared a cold war with the intelligence community. This, we're all going to get along (in the world that is) attitude is in part influencing their decisions. Plus the far left has for a long, long time had a distrust of "the man". They're printing and borrowing dollars like madmen for whatever programs they see fit, so it's pretty obvious what's going on IMO. The automakers aren't stealing dollars from the intelligence community.

 

[Thump553]

I think Germany are up in arms about the fact that they have subsidised or paid advances to GM under the assumption that the sale was going to go ahead. They now want their money back.

I think the fight this summer was about future subsidies. The German government (before the election) heavily favored the "Canadian" purchaser over a competing buyer that GM was more partial to, because the "Canadian" buyer was promising to move less jobs out of Germany.

If Germany did in fact already pay subsidies to GM, and if the language of those subsidies wasn't contingent on GM selling to the buyer Germany wanted, tough luck. Next time Germany will hire better lawyers/negotiators. If you are giving away money it's simple due diligence to put your conditions on the gift. Any parent knows that.

 

[MikeMike]

I think the fight this summer was about future subsidies. The German government (before the election) heavily favored the "Canadian" purchaser over a competing buyer that GM was more partial to, because the "Canadian" buyer was promising to move less jobs out of Germany.

If Germany did in fact already pay subsidies to GM, and if the language of those subsidies wasn't contingent on GM selling to the buyer Germany wanted, tough luck. Next time Germany will hire better lawyers/negotiators. If you are giving away money it's simple due diligence to put your conditions on the gift. Any parent knows that.

GM has stated they will return the $1.5B bridge loan the german gov't gave to Opel during the proposed sale...

They only took $1.1B and have already paid back $20M. so they owe like $900M

 

[fornax]

The German unions announced that they are taking back all concessions on salary, bonuses, etc. It will be a tough year or two for Opel, considering that the European market is fiercely competitive. The British are happy, though, because Vauxhall (the POS it is) will continue production in the UK, and BMW announced awhile back that the Mini will continue to be built there.

 

[CanOWorms]

Personally, I think that it's for the best when you consider world peace. Germany shouldn't be allowed an auto industry because of the potential for misuse. The world has already suffered so many times and the potential for yet another time is already here. Less German automotive industry jobs = safer world. IMO Germany shouldn't even have control of these types of issues with its economy. It should have been turned over to an international agency.

 

[Red Irish]

Personally, I think that it's for the best when you consider world peace. Germany shouldn't be allowed an auto industry because of the potential for misuse. The world has already suffered so many times and the potential for yet another time is already here. Less German automotive industry jobs = safer world. IMO Germany shouldn't even have control of these types of issues with its economy. It should have been turned over to an international agency.

wtf?