After last week's shock decision by General Motors to hold onto Opel rather than selling it to the Canadian company Magna, a new poll shows that a clear majority of Germans against offering aid to the company if it asks for state aid.
If General Motors asks the German government to offer loan guarantees to finance its planned €3 billion overhaul of the iconic carmaker, 66 percent of respondents to the poll, sponsored by the Bild am Sonntag newspaper, said they were against such aid. Just 28 percent said they favoured assistance.
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Germans against offering aid to GM-owned Opel
If I were the Germans....I'd reply "no", then hint that if you are financially able to run the company, then sell it. And if you are seriously in financial trouble....then view legal options to seize the company from the dimwits. These GM guys are showing a lack of intelligence, a lack of vision, and a lack of competence.
If General Motors asks the German government to offer loan guarantees to finance its planned €3 billion overhaul of the iconic carmaker, 66 percent of respondents to the poll, sponsored by the Bild am Sonntag newspaper, said they were against such aid. Just 28 percent said they favoured assistance.
GM’s restructuring plans are said to be similar to the one put forward by Magna and will entail approximately 10,000 layoffs throughout Europe out of a workforce of approximately 50,000. Unlike the Magna plan, which to satisfy the German government proposed closing none of Opel’s German facilities, GM is thought to plan the closure of at least one German site.
The German government will make a huge payout either in helping GM or in paying the benefits (unemployment, retraining, etc.) to former/laid off employees of Opel.
I have to be somewhat honest in saying that I'd love to see Opel stay with GM as a slap to the German government. I was pretty disgusted to see Merkel and other politicians chasing the cameras, yet doing little and having the ability to do so. Sure as hell, they had put a lot of effort into revising and presenting the story in a manner that didn't really exist, simultaneously generating anti-Americanism. Nothing was more important to the Germans than releasing a company they sold to GM from American hands.
Part of the problem, which the German side won't talk about, is that Opel's sales aren't as strong as their production capacity, but the German labor restrictions are so strong, they won't allow a company to adapt to changes like this, and account for increased competition and distribution of sales across competitors.
The bottom line on this is the Germans had the opportunity to release Opel from American control, yet they let the deal sit and fester until it was pulled off the table, which is how business is and should be done. They lost their opportunity, plain and simple. However, I know the German side will spin this to generate anti-American sentiment, rather than admit their own fault in this to their own people.
Part of the problem, which the German side won't talk about, is that Opel's sales aren't as strong as their production capacity, but the German labor restrictions are so strong, they won't allow a company to adapt to changes like this, and account for increased competition and distribution of sales across competitors.
The bottom line on this is the Germans had the opportunity to release Opel from American control, yet they let the deal sit and fester until it was pulled off the table, which is how business is and should be done. They lost their opportunity, plain and simple. However, I know the German side will spin this to generate anti-American sentiment, rather than admit their own fault in this to their own people.
€3B = €300,000 per job. And you don't even know whether that will actually be used for Opel or whether GM decides they could use the capital to design a few new Buicks.
The problem with that thinking is exactly what the German government used to vilify GM, and it's nothing short of astounding, as German companies do it all over the world.
Why shouldn't the parent money be able to take the money generated by a subsidiary? The Germans' problem is they look at Opel as a single entity, while Opel is part of a giant corporation they sold it to in 1929. The average German still seems to try and apply the single-entity thinking to Opel, when it is a part of a whole corporation, so no doubt, as much as I don't care for GM and mismanagement, no heads rolled and no one went to prison, as pulling the money out of Opel to bring back to GM was fully legal. This fear that the German government are creating is unfounded, as it can be stipulated the money shall not leave this area. This is simply a matter of fear-mongering, posturing, and "razing the land", with respect to sealing the future of Opel with a damaged reputation.
Why shouldn't the parent money be able to take the money generated by a subsidiary? The Germans' problem is they look at Opel as a single entity, while Opel is part of a giant corporation they sold it to in 1929. The average German still seems to try and apply the single-entity thinking to Opel, when it is a part of a whole corporation, so no doubt, as much as I don't care for GM and mismanagement, no heads rolled and no one went to prison, as pulling the money out of Opel to bring back to GM was fully legal. This fear that the German government are creating is unfounded, as it can be stipulated the money shall not leave this area. This is simply a matter of fear-mongering, posturing, and "razing the land", with respect to sealing the future of Opel with a damaged reputation.
double post
There wasn't any reputation left to damage. GM has run Opel into the ground for years. Incompetent companies aren't popular, irrelevant whether they are American or German. There is no comparable sentiment against Ford which makes your claim about anti Americanism rather moot.
I don't agree with that. Opel has worked its way up, and also shown itself as a division of GM establishing a turnover of world-class chassis and powertrain engineering and development.
I have not made an argument that GM wasn't incompetent, but additionally, you're speaking of Opel being run into the ground, which is far from the truth. Opel was running quite well, though with reduced buying of the product for some time as the economy went down and competition went up. Additionally, they had some €3bn in cash reserve-so much for them being run into the ground. They don't have that cash now because it was sent back to GM in the US, as is rightfully allowed. 10000 employees is exactly the ratio for the 33% more capacity they have than sales, and I think it's fair, but as with everything in Germany, they want all or nothing, and will lose anyhow.
As far as Ford goes, you didn't make a convincing argument against the existence of anti-Americanism by only introducing their name. Unfortunately, I have some German classes, and this is one hot topic, along with reading the German papers and watching the news.
The issue with opel is on this side, too. Not just the highlighting of GM's problems on the other side of the world.
I have not made an argument that GM wasn't incompetent, but additionally, you're speaking of Opel being run into the ground, which is far from the truth. Opel was running quite well, though with reduced buying of the product for some time as the economy went down and competition went up. Additionally, they had some €3bn in cash reserve-so much for them being run into the ground. They don't have that cash now because it was sent back to GM in the US, as is rightfully allowed. 10000 employees is exactly the ratio for the 33% more capacity they have than sales, and I think it's fair, but as with everything in Germany, they want all or nothing, and will lose anyhow.
As far as Ford goes, you didn't make a convincing argument against the existence of anti-Americanism by only introducing their name. Unfortunately, I have some German classes, and this is one hot topic, along with reading the German papers and watching the news.
The issue with opel is on this side, too. Not just the highlighting of GM's problems on the other side of the world.
The problem with that thinking is exactly what the German government used to vilify GM, and it's nothing short of astounding, as German companies do it all over the world.
Why shouldn't the parent money be able to take the money generated by a subsidiary? The Germans' problem is they look at Opel as a single entity, while Opel is part of a giant corporation they sold it to in 1929. The average German still seems to try and apply the single-entity thinking to Opel, when it is a part of a whole corporation, so no doubt, as much as I don't care for GM and mismanagement, no heads rolled and no one went to prison, as pulling the money out of Opel to bring back to GM was fully legal. This fear that the German government are creating is unfounded, as it can be stipulated the money shall not leave this area. This is simply a matter of fear-mongering, posturing, and "razing the land", with respect to sealing the future of Opel with a damaged reputation.
Actually it's a very valid concern. Of course GM can do whatever they like with their own capital, but they can't do whatever they like with government aid. You can stipulate that the money needs to stay with Opel, but that's completely unenforceable, because GM can simply move the money from one subsidiary to another by overcharging/underpaying Opel for products, intellectual property or services. That's what companies do all the time. Toyota Germany for example makes no profit at all. Why? Because they adjust the internal pricing so the company only breaks even, which enables them to book the profits in Japan and pay a (presumably) lower tax rate.Why shouldn't the parent money be able to take the money generated by a subsidiary? The Germans' problem is they look at Opel as a single entity, while Opel is part of a giant corporation they sold it to in 1929. The average German still seems to try and apply the single-entity thinking to Opel, when it is a part of a whole corporation, so no doubt, as much as I don't care for GM and mismanagement, no heads rolled and no one went to prison, as pulling the money out of Opel to bring back to GM was fully legal. This fear that the German government are creating is unfounded, as it can be stipulated the money shall not leave this area. This is simply a matter of fear-mongering, posturing, and "razing the land", with respect to sealing the future of Opel with a damaged reputation.
There are just two ways to make sure the money stays with Opel:
1) Have the government audit every single transaction between Opel and GMNA. That means check the price of every little brake caliper, light switch or control arm design Opel buys from GMNA (and vice versa).
2) Have two separate companies.
Your options are valid, and it amounts to enforcing/stipulating the flow of money, something the government is capable of doing, but they are well onto making more out of the publicity they're generating than saving Opel, as well as other big companies. Hell, no one saved any jobs at Qimondo in Dresden, whether they deserved it or not, and hell, Dresden, and Sachsen in general, are severely hurting for jobs.
I agree that posturing is an important aspect of it, but I disagree that the German government would be able to regulate the flow of money between GM and Opel without separating the two.
If GM tells Opel 'we'll be paying you $3M for this front control arm design', how would the German government determine whether that's a fair price or whether it's actually worth $10M and GM just quietly pulled $7M out of Opel?
If GM tells Opel 'we'll be paying you $3M for this front control arm design', how would the German government determine whether that's a fair price or whether it's actually worth $10M and GM just quietly pulled $7M out of Opel?
Interesting. Germany was going to bring the Russians in on the deal, which would have transferred technology and money into revitalizing and modernizing the Russian auto industry had the Opel deal went through. As it stands, Germany is collaborating in the Kaliningrad Oblast revitalization.
http://www.nytimes.com/2009/11/09/world/europe/09iht-reunif.html?_r=1&hpw=&pagewanted=all
http://www.nytimes.com/2009/11/09/world/europe/09iht-reunif.html?_r=1&hpw=&pagewanted=all
General Motors’ decision last week not to sell Opel, its Germany-based subsidiary, to Berlin’s preferred buyer, a consortium of the Canadian auto-parts manufacturer Magna and the Russian state bank Sberbank, met with rage in Germany — and in the process exposed the problem of its Russia connection.
While the government shouted foul over G.M.’s change of heart after originally accepting the sale, two Germans who had been members of the Opel Trust, overseeing the company while it was seeking a buyer, described Berlin’s preference as entirely politicized. In Dirk Pfeil’s case, he clearly complained too much, and was fired. His apparent mistake was to detail how a €4.5 billion state credit to Magna and its Russian partner would be spent:
“More than €600 million were to be used for the modernization of the Russian automobile industry. That means the transfer to Russia of specialized German knowledge and, later, the destruction of jobs [in Germany]. Perhaps the reasons for this are based in foreign policy. Perhaps [they are] a counterpart to general agreements with Putin.”
While the government shouted foul over G.M.’s change of heart after originally accepting the sale, two Germans who had been members of the Opel Trust, overseeing the company while it was seeking a buyer, described Berlin’s preference as entirely politicized. In Dirk Pfeil’s case, he clearly complained too much, and was fired. His apparent mistake was to detail how a €4.5 billion state credit to Magna and its Russian partner would be spent:
“More than €600 million were to be used for the modernization of the Russian automobile industry. That means the transfer to Russia of specialized German knowledge and, later, the destruction of jobs [in Germany]. Perhaps the reasons for this are based in foreign policy. Perhaps [they are] a counterpart to general agreements with Putin.”
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