German economics minister reportedly says no to Opel buy-back option for GM
One of the many clauses that General Motors is reportedly trying negotiate into any deal involving majority control of Opel is the option to eventually buy back the stake it is selling.
As the theory goes, GM isn't selling Opel because it feels like it doesn't add value – Opel in fact offers huge value to GM and has had lead responsibility for developing the global mid-sized, compact and small car platforms being used by the automaker. Instead, Opel is on the block because the home office needs the cash. Thus, if GM is able to be flush with cash once again, it would like to reserve the right to regain to full control.
According to Reuters, Karl-Theodor zu Guttenberg, Germany's economics minister is having none of that business. In fact, he has apparently told Frankfurter Allgemeine Sonntagszeitung that no such clause would be allowed if Opel is to receive any German government aid. The German government is also wary of any financial groups like Belgium's RHJ International taking a stake – instead, they reportedly prefer an owner with a long term interest in the industry like Magna International.
[Source: Reuters | Image: Ralph Orlowski/Getty]
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Reader Comments (Page 1 of 1)
jpm100 9:38AM (7/20/2009)
So basically the Russians can buy it but GM can't.
If I was German and had to choose between the Russians and the Americans...
Well I guess the answer is not as obvious as I thought.
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Rich 10:03AM (7/20/2009)
Note: GM isn't being *refused* the right to buy back Opel. They're being refused the *exclusive* right to buy it back. They'll be treated the same as anyone else. Just like if I sell my car to you -- would *you* waive your right to sell it to anyone else?
Americans are being treated to a lesson in how the Free Market Economy works.
RandomNess 12:42PM (7/20/2009)
@ Rich
Exactly, GM is trying to treat this like they're handing Opel off to a Pawn Shop for a limited time. They shouldn't be treated special just cause they owned it first. Once they let it go, it's up for grabs and that's that.
the4thheat 10:53PM (7/21/2009)
You know this suddenly makes the Beijing Automotive offer for Opel a lot more realistic. If they're the only ones willing to agree to a buyback clause GM might actually choose them over someone like Magna.
Really either way they'd be creating competition for themselves, but in one case they'd be able to bring Opel back into the fold if it ends up doing well and they could get back all the engineering teams, etc. And realistically the Chinese would mostly just use Opel to gain knowledge about building better cars but after a buyback they probably wouldn't be as hard to compete against as a Magna owned Opel.
None of these options are really optimal since either one is creating more competition for themselves but if GM really sees Opel in it's future this might just rule out selling it to the Germans.
Avinash machado 9:46AM (7/20/2009)
Seems stupid of GM to sell off Opel considering the engineering expertise that Opel has.
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GM 10:01AM (7/20/2009)
Great point. Frankly, the cars coming out of Opel the past 6 years or so are on a different level than Chevy. Honestly, I think Opel would do well here (in the US), under GM ownership or not. And I don't mean rebadged and renamed. Standalone Opel dealers that would compete against VW and maybe Acura. And keep the same line-up as the Europeans, hatchbacks and all.
Ben Roethig 11:33AM (7/20/2009)
Technically Opel has no engineering expertise. GM Europe's design studio is separate. All the Adam Opel division owns is the brand name and the factories.
nagmashot 12:18PM (7/20/2009)
@Ben Reothing
and Opels development center in Europe located at the Rüsselsheim Opel´s main plant were 18,000people work...it was GM´s second largest development center world wide...
Frank 1:06PM (7/20/2009)
@ Ben R. No expertise? Choke on this
http://en.wikipedia.org/wiki/GM_Family_II_engine
Besides what does expertise have to do with anything GM keeps or lets go? Are you a believer in the GMC? Now there is some fine rebadging technology.
adrian 7:38PM (7/20/2009)
It sound's shady on GM's part but you can't blame them. GM has been backing Opel for years, It's obvious they would wan't all of Opel back when they are in better shape instead of letting a rival take it all, I would do the same.
GM should just say the deal to sell Opel is off and shut down three of the four plants in Germany and the GM russian plant to save cash and blame it on the German goverment. They would be under very heavy pressure to deal with all those job losses during these tough times because we are talking about thousands of jobs here.
Hard line stance?. Yes, But this is a new GM and they have to be ruthless this time around.
AirRaid 10:22AM (7/20/2009)
Good for the "New GM". Getting the full backlash of the old GM. It was genuinely stupid to sell off Opel in the first place. Sheesh, they didn't even try with Opel.
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jpm100 10:25AM (7/20/2009)
Considering this was not the New (or Old) GM's decision, how is it good for them?
AirRaid 10:31AM (7/20/2009)
Did they not sell off Opel?
Val 11:33AM (7/20/2009)
For the amount the german goverment is offering (around 7 bn USD i think), GM/Government could easily just give the money and keep opel. It is a drop compared to the ocean of money that poured on GM. How much was it in the end, 100 bn? How is closing down pontiac comparable to selling the company responsible for their GLOBAL small- mid-car platforms? Are they gonna cancel the Buick LaCrosse if they sell the platforms to the russians?
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jv2k 12:05PM (7/20/2009)
That's what they get for selling their european market share away.
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Cmicasa the GREAT 1:53PM (7/20/2009)
WTF are U talking about hater???
The Deal is not done yet... and the suggestion above where GMNA loans GM Europe the money to simply fix Opel after another pre-packaged BK would be the way to go. Hell Saab is still in BK if I remember correctly. Koenigsegg has the letter of intent for a end of year purchase. Nonetheless... after a BK Opel would only need about $2 Billion of financing to come out swingin'.
walt 3:34PM (7/20/2009)
Opel isn't that great. They've been losing money for years and AFAIK Opel has been losing market share in Europe for at least a decade.
Many of their cars were/are considered of inferior build quality designed more for GM Detroit beancounters than for the German or European market. The Insignia and perhaps the Astra could challenge this perception. Oddly enough since GM's letting go, Opel have been regaining market share.
So the general consensus in Germany is that GM wrecked Opel and that there is absolutely no reason to give GM a second chance backed by the German taxpayers' money. Sounds reasonable to me.....
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Darko 5:46PM (7/20/2009)
I have to back Walt on this.
General perception here in Europe is that Opel lost with deal with GM and since some months its coming back on market.
As for people who says Opel has no engineering capacity,they don't know what they are talking about. they have one of finest in Europe. They would be probably better alone all this years than with GM.
GM simply doesn't have the same way of thinking as it would be german Opel.
And we all know how German cars are respected all over the world.
No,I am not German and I do not have Opel. Just like to tell truth based on facts.
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jimwhenry 5:48AM (7/21/2009)
You can buy or trade in both domestic and foreign vehicles so not just the US made cars.
henry
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