Germans Angry with US Role in Opel Negotiations

[CastleBravo]

I'm angry also. The US government now owns close to 72% of GM. No one wants to buy the vehicles because one only knows when the government will change the rules and leave me and others holding the proverbial bag/car. The germans are upset for other reasons of course but it all comes down to the same thing....government has no business in the auto industry.

Angela Merkel's Chancellery, there is still no plan in place to save Opel from following GM into bankruptcy. The problem, say Berlin politicians, is a lack of transparency -- and a surprise 300 million euro demand -- from the Americans.

http://www.spiegel.de/international/business/0,1518,627380,00.html

[Platapus]

I'm angry also. The US government now owns close to 72% of GM. No one wants to buy the vehicles because one only knows when the government will change the rules and leave me and others holding the proverbial bag/car.

Or

No wants to buy the vehicles because they are a piece of crap?

or

Something somewhere in between?

There are probably many reasons people may choose not to buy a GM product.

The question should be why are there not many reasons to buy a GM product?

[GoldenRivet]

my family has repeatedly purchased the suburban and yukon series (even a couple of vettes) over the past 15-20 years.

i will never own another GM product because of this bailout BS. we are DONE with GM and everyone they are associated with

they are like a little kid who has lost a child's game... and they whine and pout and cry and pitch a fit so badly about losing that the mommy and daddy try to make them feel better and talk all of the other kids into letting him play some more - even though he knew the rules and clearly lost out of the game.

its bullschitt. period.

Die General Motors and go to hell... your business model has failed failed... your management vs. worker rivalry has been one for the books and ultimately the inability of either party to reach a compromise has caused this problem IMHO

your turn has ended - your session has F-ing expired... your are the weakest link-good bye!... you cease to be!... you are no more!... GTFO... dont let the door hit you on the ass... do not pass go, do not collect $200

how many ways can i put it?

if your business failures are so vast and run so deep that you have to steal close to a trillion F-ing dollars just to break even - you might be Government Motors.

[Skybird]

To say that the German government was outraged, would be closer to the truth. During the crisis summit two days/nights ago, where everybody concerned and everybody of name and rank was present, it was expected that somebody with the legitimation to negotiate would show up, but instead GM and the US Treasury only sent third and fourth row delegates that were not allowed to negotiate anything, and time and again needed to interrupt the talks for conferencing with Washington and Detroit. they could as well have sent two receptionists only. Then, practically hours before the summit, there were new demands for even more money by the Americans. And finally, the Germans obviously are expected to invest several billion dollars - without having any legally binding guarantee that the money, if given to Opel, would not be transferred to GM and into the US - but that money is German worker's tax-billions, that surely is not meant to subsidise GM-America.

As the German finance minster put it: the very minium that can be expected is that if the government gives some money to Opel, the government knows in advance where that bank account is located, at what bank, in what country, who holds it and who has access to it, and what the money will be used for. All this the Americans deny. It is very obvious for almost everybody in Germany that the US government and GM, as well as FIAT and Magna (Fiat being said to have left it'S bidding this morning) do not have any interest at all in Opel surviving (especially not Fiat, since it's models are directly competing with the Opel cars over the same market segments), but try to rip of the German tax payer, sack some German tax-billions, and then leave Opel behind even more crippled in two years or so.

Additionally one must see that in the past 25 years and longer, all wins that Opel once made, were practically not taxed and were transferred to GM - but all losses were helped and compensated with German tax money. It has been calculated and shown by economists, that we already have invested and transferred several billion tax-Euros to GM that way in the past 10 years alone.

Nobody should complain that we are totally pissed by GM. Even more so since Opel, first time since quite some longer time, is said to have a palette of very good, competitive cars that find their customers. Their recent models, pushed onto ther market with the crisis already broken out, have sold relatively well. One Opel model has been voted in Germany as cars of the year in it'S segment. So they have become healthy in product developement again, they successfully left behind their Spiesser-image of the past, and they renewed that way despite having lost tremendous ammounts of money to GM, and German taxes needed to compensate for that as well as the ill going business of past years, and after plenty of their developement being taken by GM and then being patented for GM - and after having become better, now GM is puling them down with them nevertheless. That is tragic, and somewhat mean. No wonder that especially the Opel-workers themselves hate their mother-company GM so much.

This is the german perspective. The american perspective is that American negotiations often are not about acchieving results, but to collect more small en passant-gains and information without giving away anything by their own. It is trading time for increasing the pressure. That is a tough way to negotiate, and in a way is no negotiating at all. However, it represents a difference between German reasonability and good will (or German softness, if you want), and anglosaxon profit-orientation that cares little about such "altruism", but is more rooted in hardcore capitalism than european and especially German ideas of "social market economies". the Germans would be well-asdvised to jump-start to learn to wage negotiations in the same brutal way themselves, and to forget German elections this year, else they will be pulled over the table. the bill will be needed to pay by the german tax-payers.

Also, in America the looming end of GM threatens, so they say, over one million of jobs. compared to that, some 50.000 jobs in europe are no big deal for the Americans. So I conclude that the lacking american interest yesterday was both a result of their different focus that is more locked on internal american economy, as well as a well-dosed provocation that serves for increasing the pressure on Berlin in future negotiations and trying to get a big bite of the German tax cake nevertheless - the americans of course know that there are several elections in Germany this year, especially national elections, and that parties over here for that reason will think twice before loosing voters by the tens of thousands when allowing Opel to collapse. Other companies in germany use the elections as well to try to blackmail german politics, namely Arcandor. everybody is yelling for government intervention when the business is in trouble currently, and if politicians say No, they are being countered by threatenin to not vote for them.

Another point is that Obama has demanded the Germans to spend like crazy, increase government intervention in the economy,a nd do boost national debts, since he took over, in other words he wanted the Germans to act like he acts himself. By making Berlin to heavily pump money into highly risky, unsafe constellations at GM/Opel, he hopes to create the precedence that makes the Germans willing to do like that more often in the future - once the door is open a bit, it is easier to push it wide open.

And finally, with the american demands for such immense investements into GM/Opel, and GM still holding 35% of shares in Opel if the outlined deal regarding Opel's sovereignity would become reality, there is a chance to milk even more money from the Germans in the future -for then they will say that they already have pumped so much money into it that they cannot afford to now loose it, but must safe it at all cost, and pumping even more money into it. In nother words, Obama tries to get some regular national income from Germany for his own deeply troubled state finances.

A mental asylum it all is.

[TDK1044]

Most Americans have little confidence in American made cars. Why? Easy. The average American auto worker earns a lot more than his or her equivalent Japanese worker, and produces a car with a 3 year or 36,000 mile warranty. The Japanese worker is paid well, but much less than the American worker, and produces a car with a 5 year or 60,000 mile warranty.

You don't need to be a German rocket scientist to figure out which cars the Americans will purchase.

[Platapus]

Die General Motors and go to hell... your business model has failed failed... your management vs. worker rivalry has been one for the books and ultimately the inability of either party to reach a compromise has caused this problem IMHO

your turn has ended - your session has F-ing expired... your are the weakest link-good bye!... you cease to be!... you are no more!... GTFO... dont let the door hit you on the ass... do not pass go, do not collect $200

how many ways can i put it?

if your business failures are so vast and run so deep that you have to steal close to a trillion F-ing dollars just to break even - you might be Government Motors.

But how do you really feel about GM? Don't sugarcoat it. Getting mixed signals here :D

[Skybird]

Most Americans have little confidence in American made cars. Why? Easy. The average American auto worker earns a lot more than his or her equivalent Japanese worker, and produces a car with a 3 year or 36,000 mile warranty. The Japanese worker is paid well, but much less than the American worker, and produces a car with a 5 year or 60,000 mile warranty.

You don't need to be a German rocket scientist to figure out which cars the Americans will purchase.

Plus different gas consumption, which slowly crawls even into american society's mind.

Anyway, latest headline is that FIAT confirms to have left the bidding over anger due to the american style of negotiation. And the second headline of this morning is that Magna also is close to withdrawing completely - they also make the Americans responsible for their decision. A Magna representative is quoted with having said that they are not even sure that GM really wants to sell Opel at all.

the British investment group already has ejected in the past (consider us to be lucky), and the chinese offer was so late and so amateur-like (and limited to two years in scope only) that the government has refused to take them into account any further.

After having set up already two ultimatums, there is talk about the Germans again shifting it a third time. That is what ultimatums are about: to not care for them. Politics do not know ultimatums.

I hope that Magna jumps off, becasue the most honest and cleanest solution would be to open insolvence proceedings, which seem to be inevitable if the fourth and last bidder leaves, too. I did not like the idea of the government intervening at Opel from the beginning - Opel is no so-called system-relevant construct.

[TDK1044]

When I first heard about the GM/Fiat deal, my initial thought was "Oh, great. We go from making unreliable cars that Americans don't want to buy, to making rusty unreliable cars that Americans don't want to buy"

[Skybird]

Actually, the small cars by Fiat have come a long way and are very popular over here. Don't think in terms of the 50s when they were hardly anything more than rolling tin boxes.

A VW Polo with an econnomic engine, that would be my choice, if I would need a car. I'm happy I do not need any, though. Nothing but costs, and not liking to drive at all.

[TDK1044]

Actually, the small cars by Fiat have come a long way and are very popular over here. Don't think in terms of the 50s when they were hardly anything more than rolling tin boxes.

You're absolutely right, Sky. I lived in London in the 60s and those rust buckets were everywhere. I'm glad that things are a lot better now. :)

[AVGWarhawk]

Skybird/TDK,

I have owned one Japanese made vehicle. Nice car and served me well. Since then I have owned nothing but Dodge/Ford products. All have served me well. I have no desire to purchase a Japanese car based on quality or gas consumption. Sure, the SUV market gets the big eye for eating gas..check out the Toyota Tundra or that big arse SUV they build. Same with Nissan. Hyundai has their gas eating V6 motors as well. Let me tell you, Hyundai was absolute garbage when they hit this market 15 or so years ago. American car quality is fine. Gas consumption is on par because of CAFE standards. There are two issues here that others spoke of, the old pieces of crap sold as cars years ago have turned loyal customers elsewhere for cars. They will not return as a result...even it the quality is up to or beyond par. The bail out, do we really want to throw more good money after bad? I do not believe it is a great idea. The economy is still in a slump and will be for sometime. GM will be right back in the whole in a matter of 4 months because a light switch will not be hit that will make everyone go buy the GM product tomorrow thus turning the company around. Warranty, GM closes, what of the car owners warranty? Most people do not realise that GM does not make parts for the cars. These are subsidiaries. Most think if GM closes these parts will not be around to fix their GM products. Not the case but most folks do not realise this and do not purchase GM products under this assumption that once she breaks down there is not parts to repair. It is just a lose, lose and lose again situation for GM.


BTW, do you know what FIAT stands for here in the states? Fix It Again Tony....:)

[TDK1044]

Good points, AVG. The main problem GM will have now though is that it will be seen as Government Motors. Difficult to see how GM will be able to produce attractive, reliable cars that people actually want to buy, when there will be so many chefs in the kitchen.

[AVGWarhawk]

I agree TDK and I was a loyal GM customer right up to 1988. The Monte Carlo I purchased was pure garbage right off the lot. At any rate, I do not see them surviving either as Government Motors. Again, good money after bad, the loyal customer base is gone. People are scared to purchase because of possible warranty loss if the company does in fact fold. They are scared of parts not being available. Parts will be available for sure. Really, right now the prices for GM products are fantastic. I have two issues, one, I do not need a vehicle, two, I do not believe the quality is up to par with other manufacturers. I'm truly a Ford/Dodge customer.

[XabbaRus]

It's a shame as Vauxhall in the UK and Opel in Germany build good, stylish, economical and well built cars.

There is anger in the UK at the German govt. for perceived too much interference and influence over the negotiations putting German jobs before other countries workers.

I think Vauxhall and Opel cars are designed in Germany but maybe this could be a chance for UK to restart a decent auto industry. Buy up Vauxhall from GM, put in the design talent which the UK is abundant with ad voila.

However British Leyland springs to mind here.

[Skybird]

Magna gets in, after having offered a modified offer to Gm yesterday. The German government has willed to give a 1.5 billion euro-credit into it, which should be transformed into a surety over 4.5 billion euros some time later.

The German elections this year have seriously influenced this decision. FIAT retreated from bidding on tuesday, saying that the additional 300 million GM suddenly demanded would not be payed by FIAT, and complainign that the Germans would not pay that themselves. He also said the risks of the deal to get into bed with Gm would outweigh the opportunities to gain something positive from it.

Ironically, especially the German federal economy minister, zu Guttenberg (nicknamed "the black baron", :) since he is member of the CSU; I think by far not a stupid man, but a man of reason), also is against the decision that now was made obviously by the chancellor herself. He too says the risks are too high and cannot be calculated, that'S why he voted against it and would have preferred the regular insolvence. This tells you that the decision has little to do with reponsibility and reason, but with throwing tax payer's money into election campaigning.

Damn these cheating party bastards.

A precedence has been created this way, too. Now one of the two last remaining major department store chains in Germany, Karstadt/Arcandor, also demands the state to intervene in their heavily troubled business, caused by years of mismanagement, money-wasting and dilletantism in running their business (their range of goods for sale does not match customer expectations and behavior since many years). Other branches are in the starting block to call for the government embarking into a state-run economy as well.

Hell, even the German association of appartement teanants now demands to get their share from the government' spending frency, claiming that what is correct for Opel and Arcandor, must be right for them, too. It has little to do with reason and needs, but pure greed. every election is an opportunity for sheer blackmailing.

The Bundestag has agreed to implement a debt-brake into the constitution. It will come into effect in - 2020. That tells something. They now have 11 years left to water it down even more, and until then the spending frency can move on. What was it with their claim to think of the future of our children and the fianncial burdens of theirs? We hear that lame song since over 40 years now.

So much for the government's intention and promise to turn round state finances. We were on a good way before the economy crisis struck in force last year, we were close to get back to a fully balanced budget. It is not only the crisis, it also is the great shatterer of sweet words and good intentions that haunts democracies every three years: the beginning of the next election campaign.

It seems you cannot avoid the omni-present two-sided nature of things, not in this life. And at least in politics, the law of entropy seems to be always valid anyway.

The specific details need to be negotiated now, and this can turn out to be another plenty of weeks of drama and frustration, due to the tough negotation style of both the Us government and GM. The Russian partner bank of Magna will get hold of 35% of Opel, and GM also still is in the boat with 35%. Magna actually only buys 20%, and the workers themselves should buy and own 10%. So much for "Magna buying Opel". That is just a misleading formulation.

For the Germans it was a key-condition that German tax money invested into Opel could not end up somewhere in America. that'S why they wanted GM and Opel separating completely. Whether or not GM really cannot find ways to transfer German taxes at Opel to GM when holding 35% of shares... remains to be seen...
Business insiders get quoted with assessments of that the intended "solution" has a chance of success of just 20-30%.

I think a "solution" is something different.

[SUBMAN1]

When are Germans not angry at the US? All you have to say is "I am Amaerican" and they get angry! :D They can't help it.

Either we make them look bad by doing things when they are not doing enough, or they are jealous at our influence. Either way is the only way they see the US. So get some Teflon and ignore them. :yeah:

Not to HiJack your thread with the above, but it is crazy that we own a majority stack in GM yet have no say in voting rights. How does that work?

-S

[bookworm_020]

Actually, the small cars by Fiat have come a long way and are very popular over here. Don't think in terms of the 50s when they were hardly anything more than rolling tin boxes.

A VW Polo with an econnomic engine, that would be my choice, if I would need a car. I'm happy I do not need any, though. Nothing but costs, and not liking to drive at all.

Fiat in the last couple of years has really turned itself around. Considering it was in a similar situation as GM is now, maybe it will be for the best.

Here in Australia GM owns GMH (Holden) and there has been rumors that it was going to sell it off, but GM has said that it isn't thinking of doing that. Will see about that!

[Skybird]

German politicians have started to take each others scalps over the "deal". It slowly turns out that Magna burdens zero risks, the tax payer shoulders all risks, no obligation of Magna whatever exists concerning how many jobs they will kill or keep, even to keep all factories - what before was assumed to be formally mandatoryin the agreement they reached - is just a declaration of intention that legally is no binding at all. Germany signed to give credits and sureties over roughly 6 billion - and got nothing but a vague , non.-binding declaration of intention in return.

Dickheads.

As one commentator summarised it: the Germans have signed a blank check without having been given anything legally binding in return. Simply that. One could as well throw diamonds out of the window and hope that honest people outside will not keep them, but will return them.

Stupid, stupid, stupid. Damn those elections. One can only pray that Magna will stay by it's declared intentions to keep all factories and to kill not more than 2200 jobs. A legally binding obligation to do so they have NOT.

It is even feared that the deal could cost Germany more jobs, since Magna will not accept Opel to buy from suppliers that are in direct competition with Magna. Since Magna is a global giant in its field, it could mean crushing business losses for smaller suppliers and sub-contractors of the automobile industry. If Magna/Opel push onto the Russian market in strength, as they intend, it could mean losses of market shares there for non-Magna suppliers.

What a money-burning mess. All just to dazzle voters for the upcoming elections.

Additionally, a precedence has been created for the state being demanded to come to the rescue of other companies as well. The SPD is all for it, since they never cared for earning money they want to spend for their ideology anyway, and just increase debts, or tax arbitrarily so-called "richer people" to raise money. This year we also heared increasing voices from the political left that called for the introduction of a completely state-run economy like it was in the GDR.

Ironically, the economy minister zu Guttenberg has won in popularity with the German publlic because although he lost the voting on the deal, he does not hide that he is against this arranegement and still prefers a regular insolvence . The spending frenzy of the government and especially the SPD, and the handling of Opel, seems to be unpopular with a majority of Germans.

One should not have decided anything before the american decisions anyway, and one should have refused to invest any taxmoney into this insane situation anyway. Magna now holds all the trumps, and no risks, just chances, while Germany takes all the risk, with a solid chance that in the longe run it will cost not only all the invested money, but more Opel jobs then they now are saying, and job cuts amongst other suppliers as well.