Plans by Germany to contribute a colossal EUR148bn (US$186m) to the overall EUR750bn eurozone rescue plan finally staggered over the finishing line in the Bundestag in Berlin.
This afternoon also marked the announcement by Opel of its Europe-wide restructuring plan that involves swingeing cuts of 8,000 jobs, pay freezes and a EUR265m labour cost savings plan.
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The deal – subject no doubt to forensic scrutiny by labour representatives during the next few days – has been announced a whisker ahead of next week’s meeting of a government financial steering committee to discuss aid to the carmaker.
It’s a public holiday in Germany on Monday, so Opel must be nervously hoping the government beancounters will at least be able to absorb some of the financial detail – as it requests up to EUR1.5bn in loan guarantees – before the civil servants do whatever German civil servants do on their days off.
Opel CEO Nick Reilly conceded this afternoon that his competitors “had obviously tried to take advantage of our difficulties” but remained confident the German government would now give the nod to allow the company to move forward.
“The politicians are probably fed up meeting about Opel” he admitted, adding that he hoped for a positive loan guarantee response, particularly now that Opel had identified banks willing to participate, although he declined to reveal which ones.
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By GlobalDataReilly is confident Opel “has fulfilled all the requirements” to secure the guarantees but the CEO says whether this is 100% or 55% he “doesn’t really mind.”
Other European governments have agreed to Opel’s requests for assistance, but the automaker is just one of an enormous to-do list on German politicians’ minds at the moment.
Given the amount of German jobs at stake, Opel clearly stands a pretty high chance of succeeding in its loan guarantee requests, but the foot dragging by Berlin must be causing a few anxious moments in Russelsheim.
A significant amount of pain is being asked of German – and fellow European – Opel employees including bonus reductions, salary freezes and new flexible shift patterns. That must appear in stark contrast for Germans to the whopping euro bailout.
It’s pretty unfortunate timing that Opel’s request will be considered at a time when the German taxpayer is smarting at what he may perceive as a blank cheque to high spending Greeks, or maybe the manufacturer is deliberately highlighting the importance of domestic job protection.
Either way, Reilly is surely hoping any decision comes sooner rather than later.
