REPORT: Germany wants GM's plan for Opel - and a billion dollars - "quickly"
General Motors' bouleversement on the sale of its Opel brand has caused the European head of Opel vacate his office, the head of Opel labor to gulp "a bottle of wine" to get over the shock, the German head of state to request "GM to present a reliable plan for Opel quickly," and Germany's economic minister to prod GM to pay back the rest of the €1.5 billion ($2.25B U.S.) bridge loan.
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.]
Reader Comments (Page 1 of 2)
Mike 11:34AM (11/12/2009)
We have become to jaded at the word billion..
It should say 600 million by the end of the month not 600 Billion.
The scary part of it is that saying billion no longer has a wow factor.
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newsguy 11:36AM (11/12/2009)
Best. Picture. Ever.
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zamafir 11:47AM (11/12/2009)
wird
TonyInMI 11:39AM (11/12/2009)
"Where did GM get that number?" The same place GM get's all of it's marching orders now.
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ehisforadam 11:42AM (11/12/2009)
All work and no play makes GM something something...
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Francis 12:54PM (11/12/2009)
......go crazy?
Jimbo 1:17PM (11/12/2009)
don't mind if I do!
JDM Life 11:49AM (11/12/2009)
lmaoooo
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Venom 11:49AM (11/12/2009)
I don't even care about the story.
I just love the photo.
It is freaking epic.
I can't stop laughing....my eyes are watering...I just snorted. damn
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jamie 11:53AM (11/12/2009)
Oooooh! Who spilled the beans about the RHJ offer? No wonder GM sent Magna/Sberbank packing.
Actually that was a blessing in disguise. Now GM keeps full control of its best ongoing IP. However, the game plan should change accordingly. Opel should fully control the European market and Chevrolet should shrink to just Russia (and maybe Korea) for now. Buick should cover the China-Asian market. And the American markets should resound with the "New GM".
I like how Opel is being allowed to control its own destiny. +1
Let's do that with Cadillac, Buick, Chevrolet and GM as well.
Again I reiterate that not one assembly plant should close or one person should lose their job due to this development. It is all quite viable with little or no changes, except in the product definition. The number of power trains must be reduced. The amount of GM content (as opposed to purchased property) must be increased.
I, for one, am totally glad to see GM moving in this direction.
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speed12sil 1:49PM (11/12/2009)
The next step is to have GM run Opel into the ground(again) so that no one in their right mind would want to buy Opel in the future.
Thanks GM, for dashing the dream of having Opel sold in Canada.
jamie 3:38PM (11/12/2009)
You'll get your Opels in Canada; but they will be called Buicks like in China and the good ol' USA. LOL
Andrew 1:02AM (11/13/2009)
Sorry, but Opel is an "old man's" car brand in some parts of Europe. At least it's that in my country.
The small Opel cars sell well with women, and so do the Korean-made "Chevrolets" (that are also small) because they're cheap.
The larger Opel cars are not that popular here. It's all about VW or Toyota sales wise.
Aloysius Vampa 12:16PM (11/12/2009)
I'm trying not to make a nuisance of myself in the library looking at that picture.
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AngeloD 12:31PM (11/12/2009)
Merkel needs to get out from under her high horse and realize that GM will be exporting Opels to the US as Buicks, which Magna wouldn't. So in the long run, Opel stands to make out better under GM than under Magna.
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Swede 12:51PM (11/12/2009)
Merkel really don't care. Elections are over.
Judy Zik 1:13PM (11/12/2009)
Way too funny. You really think long term there is a snow ball's chance in Hell GM is going to continue to import Opels to North America? The cost of producing a vehicle in Germany is much higher than North America. Plus the dollar is so low the exchange kills them. If the Regal is launched from Germany I will be surprised. Even if it is if it sells it will quickly be transferred to Oshawa or one of the many other under utilized plants in North America. All for the same reason Ford is retooling it's plants to build Euro models here instead of importing them. Economics. In the current economy it would be cheaper for GM to build Opels in North America, Russia or any number of places and ship them back to Germany. Thus the reason why the Germans are up in arms.
wally 1:34PM (11/12/2009)
Build them here & export to Germany!!!!!!!!
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Oh4Sh0 1:48PM (11/12/2009)
Yes.. that picture is great. Props to the creator.
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RLQ 2:21AM (11/13/2009)
Best autoblog pic of 2009.
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