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

[MacGuffin]

I'm sorry but saving Opel at all cost would be against the principle of a free market. Sooner or later competitors (and I'm not thinking of VW in the first place) will complain or even sue against the federal support of Opel. I'm amazed by their patience already in this whole affair.

If a company cannot survive on its own -- no matter who's fault it is --, it must be allowed to go bankrupt. Otherwise the trust in our economical system will sustain damage and that would have much more severe results, than losing a few thousand jobs.

[Cobol74]

Bottom of the market - low cost far east competition, mid market Japanese and other Euros + EURO Ford, top of the Market specialist brands and, if they do not muck it up, Mercedes - no where for them to go.

Still I have a Vauxhall myself and you know what, it is an OK car. Does the job it was intended for - you can not race it or drift it but it is tough and reliable and cheap to own.

/EDIT Corsa's problem is the new Fiesta - wonderful car.

[AiR]

Comparing VW and Opel workers and saying one is more competent than another is both wrong and completely irrelevant, the assembly line staff does not design the car or decide how much it's going to cost. So skipping the last page which had little content, I note that Carl Peter Forster quits. I can very well understand why, but it's unfortunate as he is one of the few executives GM has that actually understands cars.

Looking at sales numbers, Opel Corsa is the 4th best selling car in Europe with 270 634 units in the first nine months. The Astra H is still the 10th best selling car with 210 463 units. Opels problem is not selling cars, Opels problem is GM.

[snoro]

So who want to help me kidnapp Bob Maximun Lutz and force him to sell opel to magna ? That would make everyone happy ?

[MacGuffin]

Originally Posted by AiR

Comparing VW and Opel workers and saying one is more competent than another is both wrong and completely irrelevant, the assembly line staff does not design the car or decide how much it's going to cost.

Have you ever talked to a real Opel fanboy? It seems like they have some kind of seminar, where they are taught how to argue with VW/Audi drivers. It sometimes has the touch of religious missionaries.

I once had a colleague who's brother had an Opel dealership. Unfortunately we were car-pooling and you cannot even start to imagine how much propaganda that guy tried to spread over me, just because I was driving an old Audi at the time.

Even though my first two cars were Opels, that bloke ruined it for me forever by talking BS all the way to work and back in his Opel Omega (Vauxhall Carlton for our British friends).

Originally Posted by AiR

Looking at sales numbers, Opel Corsa is the 4th best selling car in Europe with 270 634 units in the first nine months. The Astra H is still the 10th best selling car with 210 463 units. Opels problem is not selling cars, Opels problem is GM.

Opel's problem is that they are still trying to catch up. They have the Insignia now, good. But it comes 5 years too late to really make a difference.

They have the new Astra now. Good. But it will soon have to deal with the Golf VII. So it also comes too late.

The Corsa is now up against the new Polo and the new Fiesta, which are both much better cars. And the Polo for the first time has the potential to really become the no. 1 in all of Europe and not only Germany.

And the rest of the Opel range isn't competitive anymore, because it's old. In order to really catch up, there is more -- much, much more -- money necessary, than the 4.5 billion GM wants to get from the German government for restructuring Opel.

Then there is the Chevrolet problem. GM has established the former Daewoo brand as a cheap car alternative on a worldwide scale, while Opel was forced to remain a localized European brand and has to compete with Chevrolet in the very same showrooms here. And because you can buy Chevrolets at Opel dealers, they become more and more popular. Not good for Opel. Opel needs to be present on all markets worldwide under fair conditions, with an up to date and complete model range to be successful. And it just isn't.

What comes after the Astra? Is there another new car in the pipeline? Not that I know of.

Meanwhile car rentals have stopped ordering Opels a year ago already, because they have no idea if they get rid of the cars again in half a year or so. EuropCar alone has not renewed its fleet of 6000 Opels but only a fraction of it! I know, because I tried to get my hands on an Insignia but it's no use. And rentals are a major factor, when it comes to advertising/presenting new cars to the public.

Then there is the worldwide overcapacity of cars. Someone's got to give and currently Opel is the weakest link, being owned by a larger company that is still unfit for survival itself and has yet to find a way to exist in the coming years.

The more you look into it, the more hopeless it becomes. Opel is still in a downward spiral and it will take more effort to save the brand, than GM is obviously willing to invest into Opel.

Not that it would have been much better with Magna, mind you...

Originally Posted by snoro

So who want to help me kidnapp Bob Maximun Lutz and force him to sell opel to magna ? That would make everyone happy ?

I fear there are more of his kind, where he came from...

[Dr_Grip]

Dear Audi V6, i think you completely lost any perspective here. Even in other first world countries like the USA, losing your job means losing your health insurance and can easily mean losing your home. And even that's not bad. In most parts of this world, you'll starve if you have a job or not. You realise that even adjusted to local spending capacity, german Hartz IV is more than more than half the people on this planet make in a year?

I don't say losing your job is cool (living off next to nothing right now, i know how it is) but certainly it's not the end of the world and everyone who questions germany being one of the richest countries in the world should certainly be more grateful.

EDIT: Even if one assumes a responsibility of a government for the welfare of the people -which many people won't even accept, thinking the government shold offer protection from crime and leave them alone elsewhere- this responsibility is for the welfare of the society as a whole. This means that even if 10000 lost jobs are not nothing and it's hard for every single worker affected and his/her family, it's still not enough to dump billions of euros in government money into keeping this jobs alive while the market can't sustain them. Not because capitalism is wonderful or because no one cares for these people, but because regarding the overall welfare of society, this money could be used much better for education or something else where more than a few people profit from it. Opel as it is right now is a bottomless barrel where you can dump endless amouts of government money into instead of putting it to better use (and be it financing Hartz IV for Opel's ex-workforce).

On-Topic reply will be added later today.

[MacGuffin]

Originally Posted by Dr_Grip

Dear Audi V6, i think you completely lost any perspective here. Even in other first world countries like the USA, losing your job means losing your health insurance and can easily mean losing your home. And even that's not bad. In most parts of this world, you'll starve if you have a job or not. You realise that even adjusted to local spending capacity, german Hartz IV is more than more than half the people on this planet make in a year?

I don't say losing your job is cool (living off next to nothing right now, i know how it is) but certainly it's not the end of the world and everyone who questions germany being one of the richest countries in the world should certainly be more grateful.

I admire your effort. I didn't elaborate on it, because I recently came to realize that not being allowed to use a cellphone is already considered suffering in today's generation.

[Cobol74]

Its not a Cell Phone it's a Mobile phone - are you Europeans or not? If not, get out of the EU and clear off with you yankee chums!

NB Hyperbole.

[MacGuffin]

Actually it's called a "handy" here We didn't have a German name for it, so we created a faked English name for it

[Cobol74]

Handy - that is an OK name I think.

[argatoga]

http://www.autoblog.com/2009/11/08/r...opel-chairman/

Just hours before General Motors announced that it wasn't going to sell Opel, GM Europe head Carl-Peter Forster said publicly that Opel would be better off under the control of Magna. Talk about bad timing. Now that GM is keeping Opel, Forster is out as the head of the General's European operations. A couple of familiar names will step in, at least on an interim basis.

Bloomberg reports that GM Vice Chairman and head of Marketing and Communications Bob Lutz is taking over as interim chairman of the Opel supervisory board until a permanent leader can be chosen. The bombastic Lutz has suddenly found himself with increasing responsibility after semi-retiring back in April. Fellow GM exec Nick Reilly will lead the Opel and Vauxhall units until a replacement can be found.

GM CEO Fritz Henderson said in a statement that the hunt is on for a new Opel CEO and that no other management moves were imminent. Henderson went on to say that Opel improved under Forster, which is a real compliment when you consider that Forster replaced Fritz as head of GM Europe back in 2004. Word on the street is that GM could pick a German executive for the Opel post, due mostly to the fact that Germany wasn't very happy about GM's decision to scuttle the sale to Magna. Magna's plan called for fewer layoffs within Germany and more in other European countries.

[NooDle]

Originally Posted by MacGuffin

Opel didn't make the right cars at the right time and lost more and more ground to its competitors to a point, where no car model was competitive anymore.

Aside from all the "VW vs Opel" thing, which we have here, this is true to some extent. I think what's really sad is that Opel started to make good cars again (starting with the Astra H, the new Corsa, the Insignia, etc), so it would be a shame to lose them now.

In a way they should have died ages ago, and in another way they don't deserve to die now. They did show they can turn around.

Also, isn't Opel the only thing that GM currently has that's actually still selling anything worth mentioning? It'd be like having only a broken leg and a working leg and going "I'll cut the good one off so I can save my broken one".

Originally Posted by Cobol74

Corsa's problem is the new Fiesta - wonderful car.

True, but over here atleast it is much more expensive. And cheap stuff still sells.

Originally Posted by MacGuffin

Opel's problem is that they are still trying to catch up. They have the Insignia now, good. But it comes 5 years too late to really make a difference.

See also above. If they had the money from GM I think they could be on their way to making classbeating cars.

[MacGuffin]

This week's SPIEGEL magazine editorial:

How the Opel Deal Went Sour

By SPIEGEL Staff

The bid by the German government to secure Opel's rescue has ended in fiasco after General Motors pulled out of a deal to sell its troubled European subsidiary. Berlin lacks a strategy for how to deal with the country's most important industry.

Many refer to the man in charge at the corporate headquarters of General Motors (GM), housed in the five glass towers of the Renaissance Center in downtown Detroit, as "Fix-it Fritz."

Frederick A. Henderson, 50, the chairman and CEO of GM, has always been called Fritz, even as a child. He is a polite man who, in his 25-year career at GM, has acquired the reputation of being a levelheaded numbers and cleanup man, a problem-solver -- hence the nickname.

Last Tuesday, the German chancellor made the unpleasant discovery that Henderson lives up to his moniker. In the space of 20 lines on a piece of paper, Henderson destroyed Angela Merkel's dream of being celebrated as the intrepid savior of German automaker Opel.

In the short letter to Merkel's newly appointed economics minister, Rainer Brüderle, Henderson announced that the board of directors planned to "retain Opel Europe as part of the new GM." In explaining the decision, he cited the parent company's "improved financial position" and its newfound confidence in the "sustainable profitability" of the subsidiary. At the end of the letter, Henderson also expressed his appreciation for the "involvement and support of the German government and other European governments."

A German chancellor has rarely been given such short shrift by the chief executive of an industrial corporation. Merkel and half the German cabinet had spent more than a year in negotiations with the US company so that GM's German subsidiary, Opel, could be sold to a consortium of investors headed by the Canadian-Austrian automotive supplier Magna and the Russian Sberbank. The matter seemed to have been settled -- but then GM management performed an about-face last Tuesday. In doing so, it inflicted serious damage on the chancellor, who met with US President Barack Obama and gave a noteworthy speech to the US Congress on the same day.

The surprise coup from Detroit triggered an unprecedented wave of outrage in Germany. Tens of thousands of Opel employees staged protests outside plants in the cities of Rüsselsheim, Bochum and Eisenach, shouting "GM, get lost!" Politicians at the federal and state levels outdid each other with tirades against what Social Democratic Party opposition leader Frank-Walter Steinmeier dubbed the American "impertinence" and North Rhine-Westphalia Governor Jürgen Rüttgers, a member of Merkel's conservative Christian Democratic Union (CDU), described as the "ugly face of turbo-capitalism."

Even the pro-business Free Democratic Party (FDP), the junior partner in Merkel's new coalition government, which just a few weeks ago had been sharply critical of the former administration's rescue plans for Opel, joined in the cross-party diatribes. Economics Minister Rainer Brüderle, who belongs to the FDP, said the GM decision was "completely unacceptable."

Political Humiliation

The real motive behind all this indignation was to cover up a political humiliation of the first degree. Rarely has an administration lost its bearings as much as the Merkel-led "grand coalition" of the Christian Democrats and Social Democrats did in its attempt to forge a new European auto company under the name "New Opel."

German auto executives were not the only ones who felt that the chancellor's plan to mold a Canadian-Austrian automotive supplier, Russia's leading savings bank, the European GM subsidiaries and billions in taxpayer money into a competitive, global company was a ludicrous idea. The plan was also widely criticized abroad. The United States feared that Western know-how would be lost to Moscow, while many in Europe were convinced that Germany was trying to unilaterally protect jobs in its domestic industries. Ironically, Germany -- which usually likes to see itself as a strong advocate of fair competition -- was blatantly promoting its national industrial interests. "This deal stinks," the British newsmagazine The Economist wrote in a recent editorial.

Detroit's rebuff not only affects the chancellor, but also the state governors involved, who had hastily joined the ranks of those in favor of rescuing Opel. Hesse Governor Roland Koch (CDU), who was considered an expert on economic issues and the United States, was forced to admit: "We fell flat on our faces."

In the end, the Opel sale failed because of the same dilettantism that had characterized the government's initial approach to the sale almost exactly 12 months earlier. A controversial letter from then- Economics Minister Karl Theodor zu Guttenberg, where he wrote that Germany was prepared to support the investor chosen by General Motors "irrespective of the investor's identity," provided GM executives with the excuse they needed to allow the deal to fall through at the last minute. Officials at the European Commission had expressly warned Germany against sending the missive. "That letter was critical to the way the vote turned out," says a management consultant familiar with the negotiations.

Ongoing Plight

At stake are more than 25,000 GM jobs in Germany (see graphic) -- and the future of the country's most important industrial sector. The failure of the German plans for Opel shows that the government lacks a strategy for addressing the ongoing plight of the auto industry.

Between January and February of this year alone, more than 58,000 jobs were lost at German carmakers and their suppliers. Daimler and BMW are wrestling with the massive costs of developing the electric cars of the future, while at the same time being faced with dramatic declines in sales.

Securing the future of Germany's most important industrial sector in a global battle for market share ought to be a top priority for the country's federal and state governments. But German politicians prefer to behave like teachers who, wanting to make sure their slowest students get enough attention, suspend the lesson for the rest of the class. Last week, officials at the relevant ministries went back to the drawing board to form, yet again, new teams to continue negotiating with GM over possible government bailout funds for Opel.

Part 2: Propping Up a Poorly Managed Company

The fixation of German economic policy on the Rüsselsheim-based GM subsidiary has become a source of resentment in the boardrooms of German corporations. When the heads of VW, BMW and Daimler came together last Wednesday during a meeting of the German Association of the Automotive Industry (VDA), they were unanimous in their belief that rescuing Opel simply means propping up a poorly managed company to the detriment of competitors that are not receiving government bailout funds.

At the same time, it is more uncertain than ever whether the four German Opel plants can even be saved. GM plans to cut about 10,000 jobs in Europe.

There are growing fears among employees that things will be far worse in the end, fears that are being voiced at employee gatherings, such as a protest last Thursday in the western city of Bochum.

Eerily Silent

It isn't loud in Hall 4 of the local Opel plant in Bochum. In fact, it is eerily silent for an event involving more than 2,000 workers with strike experience under their belts.

Things were different in the past, says an older former Opel employee who is watching the event from the other side of the factory fence. "In those days, there would have been a crowd all the way back to the fence." And if someone like North Rhine-Westphalia Governor Jürgen Rüttgers had turned up, "everyone would have yelled things at him."

An assortment of government subsidies was used to lure General Motors to Bochum in 1963. The Opel Kadett was built there, followed by the Astra and the Zafira. At its high point, the plant was producing up to 250,000 cars a year. Long a bottleneck of sorts for the company, the plant is now a symbol of its decline.

Nowadays the roofs leak; buckets have been placed in a workshop near the paint shop to catch the water when it rains. Workers have been let go and bonuses have been slashed. The plant suffered hardships, but it survived. Less than two years ago, when things seemed to be turning around, GM showed up with a contract and a plan intended to rejuvenate the plant and guarantee its survival until 2016.

Executives at Opel now want to hold the parent company to that plan, but it seems that GM is suddenly suffering from a lapse of memory.

Officially, the Bochum plant is still accountable for about 20,000 jobs, even though less than 5,000 people actually work there today.

In front of Gate 4 at the plant, a sympathizer from the far-left Left Party is blowing his whistle for the cameras. Inside, on the enormous factory grounds, Rüttgers is talking about solidarity. The state governor, who is running for re-election next spring, ends his speech with the words: "You are not alone. The fight goes on. Good luck!"

Setting the Right Tone

The Rüttgers speech mirrored much of what these Opel employees have been hearing in recent months. Whenever a federal or state politician came to speak to them, it was never about costs, balance sheets or sales figures. The speakers, regardless of their politician persuasion, had a different agenda: They wanted to set the right tone in the election campaign. That meant not allowing their political rivals to claim the role of Opel's savior.

Under these circumstances, it was almost a foregone conclusion that politicians would soon warm to the Magna consortium's restructuring bid. And although the plan would mean some lost jobs, it would not lead to the loss of entire plants, at least not in Germany.

This was something the governors and the chancellor could easily live with, which explains the unanimity with which almost the entire German political establishment decided to support Magna's bid to become the new owner of Opel, no matter how attractive competing offers, like that of financial investor RHIJ, were.

It was this politically motivated preference for Magna that hurt the project from the start. In the end, it would also seal its failure.

Ticking Time Bomb

As recently as Oct. 15, everything seemed to be clear. General Motors had decided in favor of a partial sale to the Canadian-Russian consortium. In a letter to "Dear Minister zu Guttenberg," GM chief negotiator John Smith wrote that an agreement over the government's financial support was about to be reached. "GM continues to support the selection of Magna and Sberbank as the best investment partners for Opel."

At this time, however, a time bomb was already ticking in Brussels. Neelie Kroes, the EU's competition commissioner, had asked the German government and GM to provide assurances that the financial assistance would be granted irrespective of where plants were to be closed and that the choice of Magna as the principal investor was not the result of political pressure.

EU Commissioner for Enterprise and Industry Günter Verheugen, who is German, cautioned the government in Berlin not to write the letter Kroes was demanding, because it would enable the Americans to reopen a case that had long since been decided. Petra Erler, the head of Verheugen's team, warned senior officials at the German Economics Ministry and Chancellery against "playing with fire" and suggested that it would be sufficient for Berlin to state publicly that the government bailout funds for Opel had been provided independently of the carmaker's commitments to individual plants.

Opening the Door

But Guttenberg disagreed. After consulting with the chancellor and the German states where Opel plants are located, he wrote a letter to which observers ascribe a key role in the story of the Opel bailout. In the letter, dated Oct. 17, Guttenberg asked GM CEO Fritz Henderson to provide the statement requested by Brussels. The letter also included a key sentence: Germany, Guttenberg wrote, was prepared to support the investor chosen by General Motors "irrespective of the investor's identity."

GM executives interpreted the letter to mean that the door was open again and that perhaps they could hold onto their European subsidiary after all. If Germany was promising financial assistance to other investors, they reasoned, GM could also qualify.

The letter was received with great interest in Detroit, arriving at a time when General Motors was already feeling stronger. For a long time, the company was so cash-strapped that it saw no alternative to abandoning its European operations. In the meantime, however, the US and Canadian governments had provided the carmaker with a total of $58.5 billion (€38.9 billion) in fresh capital, receiving more than 70 percent of shares in the company in return.

President Obama saw to it that the board of directors of the new, virtually state-owned GM was almost completely replaced. Edward Whitacre, known as "Big Ed," became the new chairman of the board, which would also decide on the future of Opel. Whitacre, a former CEO of AT&T, is a man who stops at nothing. When he sees a rattlesnake on his ranch in Texas, he spears it with a stick and kills it. "It's not a big deal," he says.

Part 3: 'The Best Solution for Our Brand'

Whitacre was opposed to the Opel sale from the beginning. At this point, GM's position had improved considerably, partly as a result of the company's having filed for bankruptcy. In addition, business had improved somewhat, thanks to the government's "Cash for Clunkers" program and the numbers at Opel were not as bad as expected, either.

The mood within the GM board began to shift, prompted by those who had been skeptical about the Opel deal from the start and by irritation over the German government's maneuvering. After initially pressuring GM to sell Opel to Magna, it was now claiming that all investors would be equally welcome.

Only one senior GM executive, CEO Fritz Henderson, had apparently failed to recognize that the winds had changed before the critical meeting. Just four days earlier, he had insisted that the Magna deal was going to happen.

Then the board decided that GM was not going to sell Opel, after all. Henderson was quick to explain why this was the best of all solutions and, in doing so, demonstrated that he has the basic quality for a career at GM: flexibility.

At 10 p.m., Central European Time, Henderson made a conference call to the European top managers to inform them of the board's decision. It had been "an excellent selling process" and everyone had pitched in, he said, and now the board had opted for a solution that was "the best solution for our brand."

The executives in Detroit were apparently indifferent to the fact that the GM board had publicly embarrassed the German chancellor with its decision and had even done so on the day of her speech to the US Congress. The board meeting happens to fall on the first Tuesday of each month, and it was all nothing but an unfortunate coincidence, say members of the GM board of directors.

A Change of Mood

But those involved in the negotiations in Germany admit that several things went wrong with the deal. The government "chose Magna too quickly," says a senior official from one of the states where Opel has a plant. This, in turn, led to friction between the government and the EU. Besides, says the official, the German negotiators should have made allowances for the change of mood in the GM board earlier, particularly as it was already clear in August that the majority backing for the Magna deal was faltering.

The Opel drama has also been the source of considerable irritation among senior management at Daimler, BMW and VW. It deflects attention away from a much bigger problem: The future of the entire German automobile industry, not just Opel, is in jeopardy. Even BMW and Daimler, two eminent symbols of the success of Germany as the world's former top exporter, are now worried about their future. Erich Klemm, the chairman of the Daimler works council, says: "Our very existence is at stake."

The auto industry is embroiled in a battle for survival. About 56 million vehicles will have been sold worldwide this year, compared with the roughly 90 million cars produced in existing plants (see graphic). Everyone knows that not only will plants have to be closed, but that not all manufacturers will survive the inevitable weeding-out process.

Many countries have supported their auto industry in the dog-eat-dog battle for survival. The United States nationalized General Motors, while France is spending billions on propping up Renault and the PSA Group, the parent company of carmakers Peugeot and Citroën.

One in seven jobs in Germany are dependent on the industry and Berlin has so far launched two initiatives to help it survive the crisis. The first initiative was directed at Opel, and the second one, Germany's "cash for clunkers" scrapping premium, was intended to help all carmakers.

Both approaches were relatively ineffective. They were, however, tremendously risky and had significant knock-on effects.

In the Opel bailout, a company that had entered a crisis as a result of mismanagement was being rewarded. Saving Opel plants with government funds will not reduce excess capacity in the industry. In fact, it only threatens jobs at other manufacturers, such as Fiat and Renault, and perhaps even Volkswagen in Germany.

Misguided Policies

VW CEO Martin Winterkorn has calculated that his company could sell 300,000 more cars if Opel and its British sister company, Vauxhall, disappeared from the market. For VW, the production of 300,000 additional vehicles would mean that a plant like the one it operates in the northwestern German city of Emden would be operating at full capacity.

The heads of VW, BMW and Daimler would consider it completely misguided for Opel to receive loan guarantees if the brand remained part of GM. This is a policy that might be used to help an individual plant survive for a few years, but it cannot guarantee the long-term survival of any automaker. Besides, it penalizes competitors that are not receiving government bailouts.

The effect of the scrapping premium, which cost the government the not insignificant sum of €5 billion ($7.4 billion), is similarly disputed. Daimler, BMW and Porsche hardly benefited at all from the program, which mainly boosted the sales of cheaper cars. And, for other manufacturers, it was just a flash in the pan, providing a brief boost that only made the ensuing slump seem all the more severe. Sales in the German auto market are predicted to decline again next year.

Reinventing the Automobile

Meanwhile, not much is happening in the only area that could secure the future of German automakers. The CEOs of VW, BMW and Daimler complain that the government does too little to promote the development of new engine technologies.

Daimler invented the automobile more than 100 years ago. But now "we have to reinvent the automobile," says Daimler CEO Dieter Zetsche. Germany, however, is years behind countries like Japan and China in developing the necessary battery technology. There are hardly any professorships in German universities in the field of electrochemistry, which is necessary for laying the foundation for research into battery technology.

Promoting research is the most sensible industrial policy in the long term. But it has one drawback for politicians: It takes several years for successes to become apparent, and during those periods elections may have come and gone. For politicians, it is far more dramatic -- and effective, in terms of getting votes -- to support billions in loan guarantees to prevent the closure of a plant, even if the results are only short-term.

Part 4: GM Still at Risk

That is exactly what has happened with regards to General Motors, which is still regarded in the industry as being greatly at risk. The billions the US government has spent have given the company some breathing space. Nevertheless, industry experts believe that "the New GM," as the company is now called, has only a few promising models in development and will continue to lose money next year. With a few exceptions, the management at the new company is identical with that of the old GM. "Nothing has changed in Detroit," says a European GM manager.

This doesn't bode well for Opel. The unpopular parent company has no money to support its European business. And the influence of the Detroit management on Opel played a key part in the German carmaker's plight in the first place.

Now Opel President Carl-Peter Forster, who helped Opel develop successful models like the Insignia, is leaving the company out of frustration. Nick Reilly, the former president of GM Asia-Pacific, will play a key role in Opel's restructuring. Meanwhile, Bob Lutz has been chosen to chair the Opel supervisory board. The 77-year-old auto industry veteran, who was in charge of global product development at GM for years, is partly responsible for the company's misguided model policy. And now he is expected to preside over the Opel restructuring.

GM has hardly any money and no management capacity. It is unclear how Opel can emerge from the crisis when it has a company like that as its parent. Nevertheless, Opel is powerless to do anything without GM. If the US carmaker is unwilling to sell Opel, no one can force it to do so.

It is difficult to understand why the governments of Germany, Spain and Great Britain are to give billions to a US company so that it won't close quite as many factories in Europe. Indeed, this policy is only likely to endanger other jobs at Renault, Peugeot, Fiat and Volkswagen even more.

For a while, after GM had announced its change of heart, German politicians seemed to agree. The German head negotiators insisted that the US company could not expect any financial assistance.

Pledges of Solidarity

But their pledges lasted less than 24 hours. At the end of the week, the federal and state governments indicated that they might be willing to co-finance part of GM's plans for Opel, if the circumstances were right -- the condition being that as many jobs and plants as possible are preserved in Germany.

Now the governors of the states with Opel plants, which include Rüttgers and Hesse Governor Koch, as well as Rhineland-Palatinate Governor Kurt Beck (SPD) and the new governor of Thuringia, Christine Lieberknecht (CDU), want to take on the task of negotiating. At a meeting in Berlin on Thursday evening, the governors reaffirmed their solidarity with one another. But it is by no means certain that their alliance will hold up.

All four expect GM management to try to play individual plants off against each other. One potential proposal could involve sharply downsizing the Bochum plant and shifting a portion of production to the Rüsselsheim plant.

The temptations are great. Rüttgers is about to face a state election. And Lieberknecht is undoubtedly reluctant to begin her term in office with massive layoffs in Eisenach.

Does Opel Deserve to Survive?

Currently, it is often the employees themselves who are asking whether it wouldn't be a better idea to take a tough stance with GM.

Roland Müller-Heidenreich, a former member of the works council, joined the demonstration in front of the gates of the Bochum Opel plant last Thursday. According to Müller-Heidenreich, wages make up 10 percent of total revenues. If employees agreed to forego €265 million in wages and salaries -- as agreed with Magna and also demanded by GM -- "it would lead to virtually no savings whatsoever," he says. "It is ridiculous to conclude that this would boost competitiveness."

The real question, said Müller-Heidenreich, who worked in quality assurance for almost 29 years, is: "Does a company even deserve to survive if it makes its very existence dependent on a few millions in employee wages?"

Photo Gallery

MATTHIAS BARTSCH, MARKUS DETTMER, DIETMAR HAWRANEK, NILS KLAWITTER, CHRISTIAN REIERMANN, MICHAEL SAUGA, HANS-JÜRGEN SCHLAMP, BARBARA SCHMID, THOMAS SCHULZ

Translated from the German by Christopher Sultan





Source: http://www.spiegel.de/international/...660149,00.html

And for our German speaking forum members here is a really funny satire on the whole thing, which to translate into English I am just too lazy: http://www.spiegel.de/wirtschaft/0,1518,660204,00.html