General Motors may be dragging out a decision on the sale of Opel until after German federal elections in 30 days time, calculating that a new government in Berlin may drop its backing for Magna. Although negotiators hope a deal can still be reached before Opel premieres the next generation of its best-selling Astra at the Frankfurt auto show on September 17, analysts in Germany said the writing on the wall could not be any clearer.
“The intelligent voter will have realized by now that Germany will not succeed and that GM is just being considerate in view of (the election on) September 27,” said Peter Loesche, political science professor at the University of Goettingen.
By pushing the angle that GM could retain full ownership of Opel, management at the formerly bankrupt US carmaker can now position its favored buyer - financial investor RHJ - as a compromise for a German government that wants to see GM relinquish majority control.
While the White House was willing to plough $50 billion in aid just to resuscitate GM, Berlin mistakenly believed that guaranteeing billions of euros in loans to Opel gave it the upper hand versus a previously disgraced Detroit management.
Labor leaders think Berlin's fatal mistake was creating a trusteeship in which GM could veto any deal, rather that follow Washington's example and take a stake directly in Opel.
“This construct called the Opel Trust has definitely proved to be a catastrophe. A chancellor who rescued Opel with a 1.5 billion euro bridge loan paid for with taxpayer money is running after a failed management, pleading with them. It's unworthy,” Opel board member and trade unionist Armin Schild told Reuters.
GM is asserting its own interests as if its state-sponsored 11th hour revival in the emergency room was now ancient history, experts like Metzler Bank's Juergen Pieper say.
“The circumstances at GM itself have changed considerably. There is no longer this extreme pressure where management had to accept whatever was dictated to them,” he said.
“I can certainly imagine that GM decided against Magna but it is being considerate enough to avoid embarrassing the German government before the election.” (Reuters)