REPORT: Germany wants GM's plan for Opel - and a billion dollars - "quickly"
GM's response has been for CEO Fritz Henderson to Germany on an "Opel charm tour," to pay back a portion of the borrowed fund and promise the remaining €600 million by the end of the month, and to declare that it will only need €3.5 billion ($4.5B U.S.) to restructure Opel. GM crows that the amount is "significantly lower than all bids submitted as part of the investor solicitation" and how, in fact, it's less than the €4.5 billion the German government pledged to give Magna in aid (much less Magna's anticipated restructuring costs).
The gap in this scenario: Where did GM get that number? It was rumored that Belgian investment bank RHJ was only looking to hold on to Opel for a turnaround sale to GM, which would seem to indicate they weren't going to spend a ton of money on restructuring, and even its final bid was more than €3.5 billion. Moody's predicts GM will actually need €5.8 billion ($8.5B USD) to turn Opel fully around. Nevertheless, some see this as a good thing. For us, the only conclusion we can come to is the same one we've been held at for six months: a lot of questions still need answering.
[Source: Automotive News, sub req'd | Source Image: Warner Bros.]
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