Opel: The Drama That Will Not Die

What is to become of General Motors’ European subsidiary? The European auto-market is overcrowded with suppliers, that’s clear; Opel needs a guarantee of money, from someone, in order to stay on its feet financially and be able to compete. Yet the source from which the company thought it could gain the guarantee it needed – the German government – has been growing cool to the idea in light of the many new demands on its money from elsewhere (e.g. Greece). Long-time readers will know that I’ve been covering Opel’s recent travails more-or-less consistently; you can update yourself on the situation from my last blogpost on the subject here.

But now firm decisions are finally being made in this matter by the German authorities – or at least are seeming to be made. For those interested, and with the required German language skills, the ongoing saga can even be followed fairly closely on the @Deutschland_ Twitter-feed. I know: it’s that sort of thing that you are glad to leave for me to do instead, and I’m pleased to oblige. (One caveat: @Deutschland_ only follows material from the German newsmagazine Der Spiegel.) But for now, let’s go “over the jump” to this blogpost’s full article, since a couple of tweets from that @Deutschland_ feed need to make an appearance.

First came this one, overnight:

Kriselnder Autokonzern: Brüderle lehnt Milliarden-Bürgschaft für Opel ab: Die Entscheidung ist gefallen: Wirtschaf… http://bit.ly/9Hwjpwless than a minute ago via twitterfeed

That tweet links to this Spiegel article, whose lede begins with the portentous announcement “The decision has been made: Economy Minister Brüderle has refused a billion-euro State guarantee from the Deutschland Fund for Opel.” That would be Rainer Brüderle, of the FDP party which is in coalition with Chancellor Merkel’s CDU party, who made the announcement yesterday (Wednesday, 9 June). Yes, it was a difficult decision to make, Brüderle let it be known, since so many jobs are at stake (roughly 25,000, in fact). But he can’t show such favoritism to single companies like that, after all, and anyway “I am sure that Opel has a good future even without such guarantees.”

Naturally, Opel management begged to differ, and reacted with what they described as “great incredulity.” But wait! There was always the gambit they had all learned back as three-year-olds: run to mama! The Chancellor outranks her Economy Minister, after all; maybe she would do something.

Another tweet arriving not long afterward showed that these hopes were not in vain:

Autobauer in der Krise: Merkel lässt Opelaner auf Staatshilfen hoffen: Die Kanzlerin gibt Staatsgelder für Opel ni… http://bit.ly/9piTW8less than a minute ago via twitterfeed

That linked to this article. Sure enough, Chancellor Merkel was willing to say that Brüderle’s decision was not necessarily the last word on the matter. Better to wait for the meeting she was scheduled to have – today, Thursday, 10 June – with the Minister-Presidents (i.e the governors) of the four German federal states where Opel has production facilities, see what came out of that, and then maybe arrive at some decision. In any event, she declared, “In the talks with the Minsiter-Presidents I will do everything so that the workers that have striven so to keep Opel going will receive the help and support that is available to us.”

So maybe there was hope for getting the €1.1 billion State guarantee that Opel/GM was asking for after all, despite the Economy Minister’s outright rejection of the measure. Of course, that Minister is FDP while Merkel herself is CDU, and she admitted in her statement to the press that there remained differences of opinion between the parties on what to do.

Ah, but she didn’t know the half of it! Next we got this tweet:

Staatshilfen für Autobauer: Merkels Opel-Kurs erzürnt die FPD: Angela Merkel hat ihren Wirtschaftsminister brüskie… http://bit.ly/dbMRMMless than a minute ago via twitterfeed

That links to here, and you might want to click through even if you can’t read German, as the article is topped by a great picture (probably just a file-photo from out of the past) of Chancellor Merkel earnestly explaining something – with big hand gestures – to Economy Minister Brüderle and to Foreign Minister and Deputy Chancellor and FDP head Guido Westerwelle. For the headline (also in the tweet) reads “Merkel’s Opel course angers the FDP.” That’s only logical: Merkel after all has abrupty reversed an important decision made by her Cabinet subordinate who is supposed to be in charge of such things, who also happens to belong to another political party, the FDP, which has its own strong ideological reasons (concernig free enterprise, the proper role of the State, etc.) to want to block any more State guarantees for Opel.

This tale, therefore, is by no means played out. For one thing, we don’t yet know the result, if any, of that meeting of today with the four Minister-Presidents, although you could also suspect that that event was ultimately just a fig-leaf excuse for Merkel to do what she did. More significantly, we still have to see how seriously-angry FDP leaders want to get about this; in the worst case, it could lead to a fall of the German government. And that would be quite a worse case indeed, what with all the economic/financial crises going on in Euroland these days, the weakening of the euro, and also the fact that Germany actually doesn’t have a President these days since Horst Köhler resigned on 31 May.

If that happens, hold on to your hats! But surely the most powerful German officials will show enough statesmanship and responsibility (unlike the new Hungarian government, say) to settle their differences over Opel without causing such a catastrophe.

Anyway, you can be sure that I’ll keep watching the @Deutschland_ Twitter-feed closely. If anything else dramatic happens, I’ll let you know.

UPDATE: GM has thrown up its hands and withdrawn its requests for financial guarantees for its Opel subsidiary from any and all European governments, as you can read about in English on the NYT “Dealbook” site here. “We need to move on,” announced GM Europe president Nick Reilly; the mother company will simply pay for any further needed investments.

So that’s that – then again, you never know. As the Berlin (and, admittedly, somewhat leftist) paper Der Tagesspiegel comments, this is a sudden, extreme change-of-direction (an “incalculable pirouette,” in the words of the article’s title) of the sort that the German government already witnessed late last year when the company suddenly turned down/reneged on the buy-out deal for Opel that had been previously agreed with a consortium headed by the Canadian auto-parts maker Magna. So who really knows what GM will do next? With all this in mind, the Tagesspiegel writer (one Henrik Mortsiefer) concludes that it’s best simply to remember the company’s strange idiosyncrasies and to always bargain hard with it, keeping in mind that its claims that disaster will ensue if it doesn’t get its way often have been little more than hot air.

Meanwhile, the grave strains caused by this whole affair between the two main coalition partners in the German government, the CDU and the FDP, remain.

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