How many Rs did it take to run GM into the ground?
Three Bids for Opel, but Germany May Not Like Any
By DAVID JOLLY
Published: May 24, 2009
PARIS — Bankruptcy for Opel, the European unit of General Motors, remains a distinct possibility despite three offers for the unit, the German economy minister, Karl-Theodor zu Guttenberg, said in an interview published Sunday.
Though Chancellor Angela Merkel’s government is to meet on Monday to consider the bids, there is no guarantee that any will be accepted, Mr. Guttenberg was quoted as saying by Bild am Sonntag.
“We must first have a high degree of certainty that the significant tax money we will have to provide is not lost,” he was quoted him as saying. Mr. Guttenberg, a member of Mrs. Merkel’s Christian Democratic Union, said that if the bids did not improve, “an orderly insolvency” would be best for Opel.
Speaking to journalists in Berlin on Sunday, Mr. Guttenberg later clarified that “we want to avoid bankruptcy, but bankruptcy has to be an option,” said a spokesman, Steffen Moritz. The economy minister also emphasized that an “orderly insolvency” would be a tool for restructuring, “not the end of the company,” Mr. Moritz said.
Three companies have bid for Opel: Fiat, which has also bid for Vauxhall, G.M.’s British unit; RHJ International, a buyout company listed in Brussels; and Magna International, a Canadian auto parts maker that is being backed by Sberbank Rossii, a Russian bank.
Opel, based in Rüsselsheim, is part of a G.M. business that sold 300,000 cars and light commercial vehicles last year in Germany. But Opel is foundering as a result of a crisis in the global auto industry and the problems of G.M., which is expected to file for bankruptcy protection by a June 1 deadline imposed by Washington, despite $19.4 billion in U.S. government aid. G.M., which wants to retain a stake in Opel, has said that it will also need billions of euros in aid from governments, principally Germany’s, for a successful restructuring of its European operations.
To complicate matters, the Christian Democrats and their coalition partners, the Social Democrats, are publicly sparring about Opel for political advantage before national elections in September.
Mr. Guttenberg suggested Saturday that Fiat had improved its bid after some German officials and labor leaders expressed a clear preference for Magna’s offer.
Gualberto Ranieri, a spokesman for Fiat, said he had “no comment” on its bid. He pointed to interviews that Sergio Marchionne, Fiat’s chief executive, gave to the German news media this weekend in which he played down the effect a takeover would have on Opel’s work force. Workers at Opel fear that nearly 20,000 jobs could be lost if Fiat won.
Mr. Marchionne was quoted on Sunday by Bild am Sonntag as saying that “fewer than 2,000” German jobs would be lost under Fiat’s control of Opel, from a total European work force reduction of fewer than 10,000. In an interview with Der Spiegel, to be published on Monday, he said he did not see a need to close any German plants. Fiat earlier worried union workers and government officials with a plan to shut an engine plant in Kaiserslautern that employs nearly 3,500 people. Mr. Marchionne has spoken about the need to cut production by about 20 percent. But Mr. Ranieri, the Fiat spokesman, said such a cut did not equate to a 20 percent reduction in jobs. |
