DealZone

That will ultimately be the question asked about what kind of a future the German carmaker Opel faces.

Parent General Motors said on Thursday that it indeed wanted
to sell a majority stake in the unit to Canadian auto parts
group Magna and Russia’s Sberbank, a decision long favoured by the German government under Chancellor Angela Merkel.

With about two weeks to go until a general election in
Europe’s biggest economy, this would clearly be a political
victory — but the question remains whether it will also be an
economic one.

Merkel said that GM’s recommendation — which would see
Magna’s Brussels-listed rival bidder RHJ International losing
out in the battle that has dragged on for months — is going to
be tied to conditions.

Although she said that those conditions would be manageable and
negotiable, doubts remain about whether this will be the new
beginning the company is hoping for.

At the Geneva auto show, General Motors is getting down to the business of convincing European governments to pump state funds into its Opel/Vauxhall arm. Europe has long been considered one of the more profitable corners of the globe for GM. The company is talking about closing three plants there and warning officials that there will be liquidity problems at Opel/Vauxhall early in the second quarter if they don’t pony up.

Leveraging similar tactics it used in the U.S., GM is telling European leaders that the aid it needs — whatever the final price tag — will cost less than an Opel/Vauxhall failure. This is an argument likely to find more traction in Geneva than it did in Washington, where socialism is not a word used in polite company.

Meanwhile, the great race for global funding is picking up speed. Toyota, the world’s biggest auto company, is looking for dollars to keep its loan business competitive in the shrinking global auto market. Ford is again reported to be shopping Volvo in China. At speeds like these, avoiding a huge smash-up before the next big turn would be a miracle.