Germany and Russia furious at Opel blow

[FarCenter]

By Richard Milne and Daniel Schäfer

Published: November 4 2009 13:16 | Last updated: November 4 2009 22:31

Germany and Russia reacted furiously to General Motors’ surprise decision to keep Opel rather than sell it, throwing up fresh uncertainty about the future direction of one of Europe’s biggest carmakers.

The news that GM’s board had abandoned the sale of Opel/Vauxhall to Canada’s Magna and Russia’s Sberbank also led to a schism among the carmaker’s workers, with UK employees celebrating while Germans said they would start warning strikes on Thursday.

Jürgen Rüttgers, premier of North Rhine-Westphalia state, where GM proposes closing a factory, said: “General Motors’ behaviour shows the ugly face of turbo-capitalism. That is completely unacceptable.”

GM’s decision pitches the Detroit-based company into a new confrontation with the German government over Opel. At the heart of the controversy is whether Berlin would allow Opel to go bankrupt or step in to support GM financially.

GM said that it would need about €3bn in financing to restructure Opel and that it would ask European governments for money. But Berlin, which was offering Magna €4.5bn ($6.6bn) in state aid, is instead asking GM to pay back a €1.5bn bridging loan it gave to the US carmaker. GM said it had paid back €600m and was willing to repay the rest.

Rainer Brüderle, Germany’s new economics minister, said: “The behaviour of General Motors towards Germany is totally unacceptable.” However, some state governments in Germany with Opel factories hinted they could support GM’s move.

People close to GM admitted there was a “certain kind of brinkmanship” involved in its decision to retain Opel.

“If GM cannot finance it, then they will go for a controlled insolvency with a much more brutal restructuring and even more plant closures,” said one.

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http://www.ft.com/cms/s/0/18c8064a-c93e-11de-b551-00144feabdc0.html

[ananda]

1. Ouch. Ugly.

Just shows to go you how far down the abyss
"turbo capitalism" ... aka sociopathic unregulated
corporate abuse... has gone.

[DJ13]

2. Im not sure GM could afford to let Opel go

They are the only division that has the necessary long term experience at making small cars with styling that will sell in the entire company.

[FarCenter]

3. GMs cars did not do well in October

They made their volume on light trucks. Car sales sagged. So, yes, they need Opel's small car expertise.

[unkachuck]

4. "GM said that it would need about €3bn in financing to restructure Opel..."

....more US corporate blackmail? suck up the money and run?....it's good to know we're winning hearts and minds everywhere....

[TreasonousBastard]

5. Soundsl like the same sort of bullshit posturing we get here...

German states are for it or against it depending on whether or not they benefit.

Of couse the Russians are pissed-- they lost a good deal to get into the Western European auto market with cars that could actually sell. But, they'll get over it.

I'm not sure I understand, though, why the Germans (or, more precisely, which Germans) would be happy to front the Canadians and the Russians 4.5 billion Euros but want to hammer GM for running the same company.