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Germany has heaved a sigh of relief over a deal with Canadian auto parts group Magna, General Motors and the U.S. government to save carmaker Opel from the imminent bankruptcy of its U.S. parent.
The accord sealed after six hours of talks in Chancellor Angela Merkel’s offices still needs final approval but seemed set to ringfence Opel and its 50,000 workers in Europe from a GM Chapter 11 bankruptcy filing widely expected for Monday.
Merkel said U.S. President Barack Obama — due to visit Germany next week — helped swing the deal with a telephone call on Friday.
That helped clear hurdles over financing that had threatened to scupper the entire transaction and allowed GM to agree the deal with Magna about the future of its European operations, of which Opel is the centerpiece…
Opel workers favored Magna over rival suitor Fiat even though Magna will cut some 11,000 jobs in Europe, a quarter in Germany. Plants in Belgium and Britain may not survive…
Like its parent GM, Opel has suffered acutely from world recession. Its fate has gripped Germany, where the auto industry remains a potent symbol of the country’s postwar recovery…
Russian state-controlled Sberbank, which is helping to finance the deal and is set to get a 35 percent stake in Opel, welcomed the agreement as a way to restructure the Russian automotive industry…
Another stumbling block had been U.S. Treasury opposition to German demands that Opel assets be temporarily placed in a trust to protect them from GM creditors. Germany will now release the bridge financing to tide Opel over until a merger is completed.
GM’s ownership never contributed much of anything as far as I coud see. In fact, I think they held back development of vehicles like the diesel-hybrids Opel showed at a number of venues in recent years.
Does this mean that Opel will start selling cars in the US? Ive never seen them here in the states but I am a fan of their hatchbacks.
If anything, it reads like they’ll be expanding production and export eastwards.
Good stuff.
My first car was a 69 Opel GT maybe my next car could be a Opel GT. I was wondering what was going to happen with the Sky/Solstice.
Opel has never been on my car buying radar.
#5
Lou they may have been and you were just unaware, many of the best of what GM has to offer in the States has a good deal of Opel in it. Chevrolet Malibu, Saab 9-3 & 9-5, Saturn VUE, Pontiac Solstice, Saturn Sky just to name a few.
Good news.
Why exactly is the saving of Opel so important? Not exactly a name most Americans, such as myself, have heard before. I am just wondering what impact there would have been had Opel gone under?
were it not for government standards, you would have more diesel/diesel hybrids here in america. in fact, there is a dodge caliber made here in the USA that gets (if my memory serves) 35-40mpg. buuut, they all go overseas…..enviromental standards suck!!
Finally, some good news.
GM and Opel, were an unhappy marriage. Like a domestic battery victim, it’s nice to see Opel in “refuge support”.
Two words for this: economic fascism.
MY prediction is that Magna will sell it off in a few years, and again Fiat will be there.
#8 – Riker17. It means thousands of people will still have jobs after all is said and done.
#13 – Orangetiki – My prediction is you will see Opel dealerships opening up in North America within 5 years.
I hadn’t heard of the Opel in years. So it surprised me that they were still around. These financial deals don’t save ALL the jobs, at the automakers. So I suspect what jobs they’re saving the most are the top executives’ and the value of the stock for the majority stockholders. We’ll keep the rich for suffering too badly, by god! But the jobs of many of the company’s actual productive workers, will still get cut. And these filings appear to be how they get around their unions, to eliminate jobs, benefits, and pensions.
#1, you can purchase an Opel Astra hatchback in the US today. GM markets these under the Saturn badge. I bought one last year and its a great vehicle. A couple other Saturn models are based on Opel designs.
#14 – yes, Canada saves a few thousand jobs.
Our Canadian newspapers worked out the math.
1.4M$ per job saved.
No, I’m not pleased at this precedent. I see no end in sight.
ie, GM used to make lousy cars compared to Jap cars in the 90’s.
GM wised up, starting making quality car that don’t rust to death in 6 years in late 90’s.
Many GM owners now have 5+ year old cars they don’t want to change because they work, plenty of recycled/similar parts to fix them cheap.
Planned obsolescence isn’t working anymore.
GM should have focused more on world market as they greatly improved quality, instead on planning on the 5-yr replacement trend of North Americans.
Nothing to do with union, labor rates, pensions. Toyota has unionized NA plants and actually pays in some cases more than GM.
It’s all about sales. All sales are down. All cars quality & engineering has improved.
The market can only support so much new cars. Every manufacturer has to downsize accordingly. Paying to keep plants and production ‘up’ is a big mistake.
Too much unsold inventory will create havoc.
I have a huge GM and Mazda dealerships where I live. They both have over 1,000 new cars sitting there. Funny seeing 200+ blue Mazda 3’s lined up along the highway. For months now.
Toyota & Honda inventory? Easily less than 100.
Together I’d say. Like 1 of each model for show/demo, and a few extra popular choices.
So which business model is the wisest? One caters the impulse buyer, the other, a planned purchase with a delivery delay.
Belinda Stronach, the former CEO of Magna, and now a vice-president of Magna, and daughter of Frank Stronach in the story, was a former bedmate of Peter MacKay, current Cabinet Minister in the Government of Canada:
http://tiny.cc/4V4tl
The Government of Canada now owns, what, about 8% of GM ?
No English language journalists on google have commented on this connection. The only hit I got (for)
“frank stronach” “belinda stronach” “peter mackay”
was in Spanish:
http://tiny.cc/3fhKu
The Spanish article indicates that the Russian connection was already strong with Stronach, who very uncharacteristically sold an interest in Magna to a well connected Russian industrialist in 2008.