Blog: Opel/Vauxhall: could it be any messier?
Dave Leggett | 25 August 2009
The latest straws in the Opel sale wind risk making an already politically complex situation even more so. The suggestion is that GM is now wondering if there's a way to hang on to Opel after all.
We have gone quite a long way down the track for that possibility to suddenly pop up, but this is the more self-confident, post-Chapter 11 'New GM' that has been through the ringer. It is clearly unimpressed by the terms of a prospective sale to Magna.
Attitudes in Detroit may have been hardened by the apparent lack of progress in protracted negotiations with Magna and the relentless pressure being applied by the German government for GM to pick Magna over RHJ.
The cash-flow position of GM's European operations is also less urgent than it seemed earlier this year. Sales in Europe aren't great and Opel/Vauxhall has lost share this year, but the sales picture could be much worse (there has been some lift from scrappage incentives) and a new Astra is at least imminent.
Hanging on to Opel might mean putting the begging bowl out to other governments in Europe, but it may just about be possible to put together a deal that keeps Opel afloat and GM in charge. Presumably, GM could then make the restructuring moves it believes are necessary in Germany without interference from the German government.
Needless to say, this scenario would probably cause something akin to fury in Berlin. Obama's phone would be red-hot.
Is this latest twist merely a negotiating ploy to wrest concessions from Magna? If so, it's a risky one because the labour unions in Germany now appear ready to take industrial action that Opel can ill-afford. They may have concluded that they have nothing to lose and that they have kept their powder dry for long enough.
There's never a dull moment in this saga, but you can't help sympathising with the Opel/Vauxhall workers across Europe who would like things resolved and the ability to properly plan ahead, once more.
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