News that Germany’s economic steering committee is to meet tomorrow (9June) to discuss – again – Opel’s request for EUR1.3bn (US$1.6bn) in loan guarantees – has not exactly generated great hope the deal will be approved.
The seemingly interminable negotiations have become mired in confusion as meeting after meeting has been delayed or decisions postponed, but it is looking increasingly doubtful if Germany’s paymasters will sign the cheque guarantee Opel is so keen to have.
General Motors decided last November it would axe plans to sell Opel to a consortium led by Canadian supplier Magna International and Russia Sberbank and regained full control of its European division after paying back an emergency loan.
But the decision clearly angered many in Germany, who felt the consortium offered the best way forward for the troubled Opel plant.
“I think they [government] were very disappointed for GM not to sell Opel,” one commentator told just-auto. Which must be an understatement.
And the government’s ire has been provoked even further by Opel subsequently requesting the loan guarantees despite many in the German government protesting GM’s financial position is suffiently improved for it to arrange finance itself.
There is of course one major elephant in the room. Politics. It is the backdrop to every decision being taken at the moment in Germany and is perhaps at the heart of the current Opel impasse.
The current Christian Democrat-Liberal coalition headed by chancellor Merkel is experiencing a certain unpopularity as the true extent of proposed austerity measures start to become known.
As with all coalitions, there is a natural tension at the heart of the relationship and the German liberals’ instinct for government not become too involved with business is maybe one of the reasons the economic steering committee (has ever a body with a duller name generated more headlines?) is dragging its feet.
The coalition is looking increasingly unstable as reality bites and Opel’s request is just one in a long line of begging bowls being waved.
And the unions are starting to rattle sabres now too. Dire predictions of factory closures and job losses are also beginning to appear on the radar of Germany’s local regions, whose highly devolved basis means local politicians wield significant power.
The sooner the steering committee makes a decision one way or the other, the sooner GM can start planning for its European division’s future.
But, as Opel CEO Nick Reilly has said, there is no plan B; maybe it’s time to start thinking of C and D.