GM: Neener Neener we keep Opel, fuck you European governments!

[D-Fence]

GM Board Decides to Retain Opel

* New GM supports restructuring of Opel
* GM restructuring plan involves lower investment compared to investor proposals
* Discussions with stakeholders on restructuring to begin in earnest

DETROIT – Given an improving business environment for GM over the past few months, and the importance of Opel//Vauxhall to GM's global strategy, the GM Board of Directors has decided to retain Opel and will initiate a restructuring of its European operations in earnest.

"GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," said Fritz Henderson, president and CEO. "We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future."

On a preliminary basis, the GM plan entails total restructuring expenses of about €3 billion, significantly lower than all bids submitted as part of the investor solicitation. GM will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring. While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence.

"While strained, the business environment in Europe has improved." Henderson said. "At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured. We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We're also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement."

Henderson added that GM also hopes to build on its already significant business in Russia and to resume work directly with GAZ to contribute to both the modernization of its operations and the joint development of the Russian vehicle market on a mutually attractive basis. More details on the next steps in the restructuring will be provided as the plans and developments warrant.

###

About General Motors: General Motors, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.

###

Well, I saw it coming all along. They used the sale talks and bancrupcy talks to keep Opel alive until GM partly recovered and keep it now.

This is the time to freeze all government financing for them in Europe imho.

[Jens]

Although this doesn't come as a suprise I'm still dissapointed, would've been interesting to see what Opel could come up with when liberated from the GM overlords.

And I agree with D-Fence, no more EU financing for GM.

[LeVeL]

I hate the big three so much. Mark my words - GM will be back in the shithole begging the government for money in no time.

[argatoga]

What a shock. Or not. Once the US bailed them out GM had no reason to sell their European division.

[Spectre]

Exactly - and they don't need to beg for more money, the unions' pet President and Congress will just shovel more at them.

[Twerp128]

GM was going to take a gigantic loss amputating Opel. I can't say I blame them, if they can restructure Opel with a decent size investment why wouldn't they. Especially considering Opel was GM's only real foothold in the European market.

Seems to me GM is thinking long term for a change.

[Brother Michael]

I thought something was missing from this thread...

Originally Posted by Spectre

Exactly - and they don't need to beg for more money, the unions' pet President and Congress will just shovel more at them.

...and there it is.

[MacGuffin]

It's strange how suddenly everyone saw this coming

Since a new thread has been started on this now, I repost my summary from 2 weeks ago:

German government: We will only give guarantees of 4.5 billion Euros, if Magna buys Opel

GM: Alright, alright. If we can't get the money ourselves, we will sell Opel to Magna then. Give us the contract already

Magna: Yay, we're going to be a carmaker!

Russian car industry: Yes, we're going to get western technology at last!

EU Commission: Just a minute! If the German government wants to give guarantees of 4.5 billion Euros, then they have to offer them to all candidates, not just Magna. Otherwise it would violate EU laws!

German government: Sorry, if you misunderstood us, hehe Of course we would have offered it to everyone else, too. Now sign the contract please

GM: Wait a minute Then we can keep Opel and still get the 4.5 billion Euros?

German government: Sign the contract... pretty please?

GM: Umm... no I think under these circumstances we keep Opel. Give us the guarantees now or we will close some factories

German government:

Magna:

Russians:

German taxpayer:


MacGuffin:

Fritz Henderson said the costs of the "restructuring" of Opel will be about 3 billion Euros and has already asked the German government for help with that

There are two possibilities now: Either the German government pays to GM and will look like a bunch of complete idiots, because German taxpayer money will flow into the USA. Or they won't pay, will cancel the already given credit, which will probably mean closing of factories and thousands of Opel workers being fired, maybe even the end of Opel/Vauxhall.

We could have had this much quicker, shorter and less nerve-wrecking for the ones involved, folks.

[Spectre]

Originally Posted by Brother Michael

I thought something was missing from this thread...



...and there it is.

They're already setting the stage and moving in that direction, or trying to. And we're probably going to bail out GMAC some more:

http://www.washingtontimes.com/news/...home_headlines

Congressional overseers and many analysts are skeptical about the post-bailout prospects of success for General Motors Corp. and Chrysler Group LLC, and some say they will need to raise more cash as early as next year.

Observers see little chance of another taxpayer bailout given the opposition to providing the automakers with $75 billion this spring and the administration's statements that it does not intend to commit more money to the sector.

But that doesn't mean they won't need greater funding — and the capital markets may be no more receptive than the government, especially given the risk of "political interference," as a congressional oversight panel put it.

Indicating its own concern for GM and Chrysler's sales, the administration said last week it is in talks to provide a third bailout to GMAC Financial Services, GM's former finance unit now 35 percent owned by the government. The lender is a huge source of auto loans, and its failure could decimate sales at the two automakers.

More at the link.

[narf]

Smart move, GM.

According to the faz the works council is withdrawing their offer of reduced pay, and want a general strike to protest.
The 1G€ credit is callable on November 30th which may render Opel insolvent.

[MacGuffin]

Well, the German federal elections are over now. No need to further delay the insolvency of Opel. Rest in peace.

[D-Fence]

Look what I just built!

[NooDle]

Originally Posted by MacGuffin

lotsa smileys

This pretty much sums it up... i knew it was taking too long to close the Magna deal.

Can't the EU go like : we'd like our 4.5 billion back please? kthxbye?

GM were smart and kinda assholes, they waited for long enough for the car market to start picking itself up again, and now they're like "screw you, I want a piece of that action"

they, of course, seem to forget that the money they got was what gave them the opportunity to wait for so long in the first place, otherwise they'd be long gone now...

[AudiV6]

Those stupid bastard CEO's of GM! Lets take a shotgun and break into their office! What a bunch of corrupt yanks!

They sent thousends of workers to hell, its just another knife sticking into the heart of the German industry!

[Cobol74]

And Belgium and UK. ...

[Spectre]

I know I'm going to get negrepped for this, but what the heck. Ahem.

"HA HA HA YOU JUST GOT SUCKERED BY OBAMA'S CAR COMPANY!!!!!!"

Now back to our regularly scheduled programming.

EDIT: FYI, Obama Motors' next trick appears to be attempting to sucker the Koreans into giving them money in the exact same fashion.

General Motors head seeks more money for GM Daewoo
Submitted by Sukhpreet Manchanda on Thu, 10/15/2009 - 10:15.

General Motors head seeks more money for GM Daewoo Seoul - The head of US automaker General Motors Company (GM), Fritz Henderson, is seeking new credit for its subsidiary GM Daewoo Auto and Technology.

Henderson said at a GM Daewoo factory in Bupyong on Thursday that he had a "constructive and open dialogue" with the state-owned Korea Development Bank (KDB) the previous day in Seoul.

They discussed how to ensure a successful future for GM Daewoo, the Yonhap news agency quoted Henderson as saying although he did not give details.

The talks with KDB, GM Daewoo's largest creditor, were ongoing. GM Daewoo and KDB are in discussions about a loan of 1 trillion won (866 million dollars).

More at the link.

[narf]

Originally Posted by NooDle

Can't the EU go like : we'd like our 4.5 billion back please? kthxbye?

Germany's 1.5b€ loan is due to be paid in four weeks.

[Dr_Grip]

Originally Posted by D-Fence

Look what I just built!

Why is out new secretary of defense in this picture? Sure, he looks more handsome than paranoid wheelchair guy, but still... THIS MEANS WAR?!?!
*laughs*

Originally Posted by MacGuffin

There are two possibilities now: Either the German government pays to GM and will look like a bunch of complete idiots, because German taxpayer money will flow into the USA. Or they won't pay, will cancel the already given credit, which will probably mean closing of factories and thousands of Opel workers being fired, maybe even the end of Opel/Vauxhall.

Nope. Cause if the german (or british, as they jumped onto the bandwagon) backs out of the offers made to Magna in a very public way, GM will sue them under european law for messing with free trade. And they will do rightly so. Government loans alone are enough of a problem, but only giving them to the right company is taking it to far.

Apart from that: Opel is the least unprofitable part of GM's worldwide operations (i don't know about Holden, but definitely in less bad shape than GM USA) and would be in even better shape if GM USA hadn't drained any money out of them to fix their own books for years. Keeping Opel is a logical choice for GM USA and might not even be that bad for Opel... Maybe they'll go down with the sinking ship, but maybe the russians would have ruined them too. It is not like the Magna consortium was exactely trustworthy. Especially the way they gave in to anything the german or british government asked for made me uncomfortable ("ok, ok, if you say so, we'll only cut half as much jobs as we just said we'd have to cut to be profitable") - we'll never know.

[AiR]

It's interesting to see just how unpopular one can get. GM is hard at work redefining the spectrum of unpopularity.
I think they have some mid-level friday afternoon relaxation meeting with a chart and they draw lines on it to illustrate how their public relations have worsened over the course of the week. And they eat snacks and joke on how they need to get a longer piece of paper for next week.

Clark: "People loathe our company 11% more this week than last week!"
Kent: "Huzzah Clark! That is excellent!"
Clark: "I know!"
Bill: "Ha-ha-ha ha!"
John: "This so made my weekend."
Clark: "I'm off to sleep with my secretary!"
Kent: "Huzzah!"

[narf]

Originally Posted by AiR

It's interesting to see just how unpopular one can get. GM is hard at work redefining the spectrum of unpopularity.

The theory of absolute zero on the popularity scale is literally killed. To death.