Opel Impasse Roils Germany
By Brendan Moore
The decision by the board of GM a few days ago to reject the latest offer by Magna to take control of Opel has made almost everyone in Germany unhappy, most notably Angela Merkel, the German Chancellor.
Merkel, the Conservative leader of Germany, governs with the help of a coalition of Social Democrats, who are also unhappy that the situation with Opel has dragged on for so long.
German politicians have stated publicly that they would like the US government to help broker a deal at this point, and it is known that Merkel’s rival in the next election, German Foreign Minister Frank-Walter Steinmeier, has put in a telephone call to Hillary Clinton, US Secretary of State, in order to express his concerns about the pace and the results of negotiations.
Magna, the huge Canadian-Austrian parts consortium, backed by Russian banking interests, is the overwhelming favorite of German politicians and ordinary Germans to get control of Opel, but GM is not yet convinced that they are also the best buyer from GM’s point of view. GM believes it can get better terms from RHJ International SA, the other bidder on Opel.
However, the RHJ bid is not popular in Germany as there is a concern that RHJ will slash jobs and move some Opel production out of Europe, and in particular, Germany.
Merkel is starting to show some public impatience with GM and their insistence on their own terms, stating this morning on television in Berlin that a decision by GM was “urgently” required for the sake of Opel’s future, and, Germany as a whole.
“I regret that a final decision wasn’t made, but I hope it will happen soon, because both for the workers and the economic situation at Opel, we urgently need a decision. The conflict of interest could be that we think Magna has made a very good offer … which makes GM a minority shareholder in the whole set-up, and there may be voices at GM … who’d prefer that this minority shareholding wasn’t so marked,” she stated.
Opel directly employs around 25,000 people in Germany, and many multiples of that number depend on Opel for some part of their livelihood. Opel is also a major source of German pride, and part of its national identity. With a federal election coming up on September 27, Merkel very much wants to get a deal done for Opel as soon as possible.
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