German chancellor hints at possible state funding package for Opel brand
17 November 2008

State funding of Opel moved a step closer over the weekend, when Germany's chanceller, Angela Merkel, discussed the issue with US treasury secretary Hank Paulson.

Opel managers, including Carl-Peter Forster, Hans Demant, and employee council chairman Klaus Franz, are scheduled to meet Merkel this afternoon to discuss loan guarantees.

"I think that the federal government will do firstly everything that is necessary to help the company," Merkel's spokesman Ulrich Wilhelm told a government press conference. "But on the other side, naturally maintain a regard of the consequences of how this is handled for other companies."

Opel bosses are concerned that the precarious financial position of its US parent, GM, could threaten their successful European car production company, whose latest model, the Vauxhall Insignia, recently won European Car of the Year 2009.

They have been pressing the German and state governments for loans to cushion the impact of any problems.

>>Read more about GM's sale of Suzuki

German leaders have said that they are keen to help the car maker, which employs around 25,000 people in Germany, but are determined that any taxpayer funding will not make its way to GM in the US.

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Comments
6

17 November 2008

Would this essentially mean nationalisation? I can only begin to imagine the political and diplomatic fallout of that. Is it legal? Who then would own the rights to what? Will Vauxhall then become Opel?

I'll be fascinated to watch where this goes...

17 November 2008

[quote Agitprop]Who then would own the rights to what? Will Vauxhall then become Opel?[/quote]

Essentially the German taxpayers through their govt are being asked to keep afloat Opel's operations in Germany as GM in America goes under, or gets radically rationalised. This means the legal entity Adam Opel GmbH will be assisted, employing around 25,000 workers across four main sites in Germany. Vauxhall in UK and its two main sites employing around 5,000 workers is not covered. Would expect major trouble for Ellesmere Port operation in the days ahead. IBC Vehicles Ltd in Luton is also under threat.

17 November 2008

If it's done sensibly, I'm sure a package will be put together, where the German government will purchase shares in the company and end up being a stake holder. It won't mean nationalisation but is should secure enough of an interest in the company for them to be interested.

If not, now would be a great time for the European parliament to do something sensible on behalf of all the countries that rely on Vauxhall / Opel production and supply. Don't suppose that will happen though.

 

 

It's all about the twisties........

17 November 2008

[quote horseandcart]Essentially the German taxpayers through their govt are being asked to keep afloat Opel's operations in Germany as GM in America goes under, or gets radically rationalised. This means the legal entity Adam Opel GmbH will be assisted, employing around 25,000 workers across four main sites in Germany. Vauxhall in UK and its two main sites employing around 5,000 workers is not covered. Would expect major trouble for Ellesmere Port operation in the days ahead. IBC Vehicles Ltd in Luton is also under threat[/quote]

Thank you for explaining that. I have quite a good understanding of economics but not a great one of business and I just couldn't get my head around how it would work. But if they do prop up Opel in Europe and GM, hypothetically, goes to the wall, what then? Could they own a big enough stake to claim the whole of European Operations and then run the company based around GM manufacturing equipment, from GM factories with GM designs and design teams? It would be quite extraordinary and, I venture to suggest unprecedented, wouldn't it?

17 November 2008

[quote Agitprop]Could they own a big enough stake to claim the whole of European Operations and then run the company based around GM manufacturing equipment, from GM factories with GM designs and design teams? It would be quite extraordinary and, I venture to suggest unprecedented, wouldn't it?[/quote]

When needs must, bottom line economics goes out the window and political considerations take over; which means preserving well-paid, well-regarded jobs/professions, in a highly auto industry dependent country like Germany, that has a deep psychological fear of mass unemployment and disorder. Every effort will be made to keep Opel going. Opel, somewhat like Ford of Europe, is culturally distinct from its owner in Detroit. I understand a lot of Germans accuse GM of installing American managers at Opel causing the problems of market-share loss in recent times. We have to remember, that unlike Vauxhall in UK, Opel to many Germans is a German company, not an American company, and one that traces its roots back 140 years or so in manufacturing of sowing machines, bicycles and so on. Also not to forget that Opel up until the 1970s was neck and neck with VW in the affections of German buyers and in sales volumes. Up until the early 90s Opel employed over 50,000 workers. The rump that's left however is in my opinion very good, as evidenced by the ability to design, engineer and produce a car like the Insignia. Whether it can stand alone at around a million units of production is doubtful.

17 November 2008

I know what i am about to say would almost never ever happen but:

As far as I can see it Ford and GM Europe have very little to do with their american parents, in terms of technical tie ups etc..

So it wouldnt make much difference if the compaines split and Ford Europe to become its very own comany and one that makes profit along with Opel becoming GM of Euope effectivley and if they would also be profitable as they produce the bread and butter models throught europe!!

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