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.