Commentaries

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Lower Opel costs to help government aid

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General Motors’ decision to scrap the sale of Opel rests on the carmaker’s calculation that the hole in its European unit’s finances is not as deep as previously feared.

Governments should welcome the lower demands on taxpayers with open arms. But there is still some horse trading to be done to get everyone on board. 

GM’s chief executive Fritz Henderson is due to present his plans for Opel next week. He has good reason to be bullish.

GM’s previous forecast that Opel needs $3.3 billion to keep going until 2011 appears to have been sharply revised. Some in the industry think the amount required could be nearer 60 percent of that figure — some $2 billion.

Germany will have to change Opel deal after election

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opelanerIt looks increasingly clear that Germany will have to change its deal to aid carmaker Opel once Sunday’s general election is out of the way.

The European Commission has signaled to Berlin that promising 4.5 billion euros in loan guarantees to only one of the two bidders for General Motors’ European arm to preserve all four German production sites and most Opel jobs in Germany may breach EU rules on state aid to industry. EU regulators want to know why Chancellor Angela Merkel and four German states offered the money to back car parts maker Magna’s bid but not for financial investor RHJ International’s, and on what conditions. 

Should Volkswagen demand a Magna Carta?

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GERMANY/Magna International seems to be taking seriously threats from Volkswagen to pull its business following the Canadian car parts maker’s Opel victory.

Magna’s co-CEO Donald Walker is saying that after talking to them, most of his other customers are happy that the car parts group – which along with Russian backer Sberbank is buying a 55 percent shareholding in GM’s Opel — is able to protect their technologies.

German Opel aid tests EU rules

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opel-logosThe credibility of the European Union’s single market and state aid rules is at stake over Germany’s selective offer of taxpayers’ money to preserve Opel factories and jobs on its soil.

On the face of things, it looks like an open-and-shut breach of state aid rules. General Motors agreed last week to sell 55 percent of its European arm to a consortium of Magna and Russia’s Sberbank under massive pressure from Berlin.

Can Magna keep its model juggling act with Opel?

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OPEL/Cries from Volkswagen about pulling its business from Magna if the Canadian car parts maker ended up owning a stake in GM’s former European unit Opel ring somewhat hollow given the success Magna has had in juggling its customers’ different needs so far.

Even so, Magna is trying hard to keep its customers — which also include Toyota, Ford and BMW — happy by vowing to ringfence Opel from the rest of its business now it has won the long battle to buy GM’s former European unit.

Not the final word in GM’s Magnum Opel

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GM-OPEL/So German Chancellor Angela Merkel has got her way. After months of pressure from the German government, General Motors has finally caved in and agreed to sell a majority stake in Opel to Canadian car parts maker Magna and Russian backer Sberbank.

It isn’t all over yet — GM is still attaching conditions to the sale of a 55 percent stake in “new” Opel — but the timing of the announcement and the apparently good news for Opel’s 25,000 German employees will be music to Merkel’s ears with just over two weeks to go before a Sept 27. general election.

Germany wants GM answer on Opel

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OPEL-RHJ/Germany’s Economy Minister Karl-Theodor zu Guttenberg is boldly telling the German public that he expects a “fundamental decision” from the board of General Motors on the future of Opel next week.

He goes further, saying in a television interview that with offers from Canadian car parts manufacturer Magna and Belgian-based investor RHJ International on the table, it is tme for GM to “give in”.

RHJ plays cool hand in Opel bidding

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GERMANY/RHJ International is playing a canny hand in the political poker match that is the sale of GM’s Opel. The Belgian financial investment house is keeping itself in the game by steadily upping the stakes, increasing the pressure on Berlin to take its bid seriously.

While the German government has so far thrown its considerable backing behind a rival offer for Opel spearheaded by Canadian car parts maker Magna, it has yet to force GM into a deal.

Germany should call GM’s bluff

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Recently bankrupted companies seeking billions in taxpayer handouts do not generally have the strongest hand at the negotiating table. Yet General Motors seems determined to drive a hard bargain over the bailout of Opel, its European car arm.

After months of tortured negotiations with the German authorities, GM is now threatening to reverse away from the deal. However, it appears to have few alternatives.

Driving an Opel round in circles

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Opel sign (Reuters photo)True to form, GM’s negotiator on the sale of Opel has poured cold water on expectations of a slam-dunk deal for Canadian car parts group Magna and its Russian backers.

John Smith (no relation, but I’m impressed by his negotiating) maintains in his blog that GM will compare the latest Magna offer with the proposal it has on the table from Belgium-based financial investor RHJ International.

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