• Print
• E-Mail
• Feedback

09/01/2009

Angela Merkel likes to govern by telephone. When she wants to consult with her counterparts in other countries, the German chancellor usually reaches for the secure-line handset that sits on her desk. Her preferred way of giving instructions to her staff is by sending text messages on her cell phone. At times, particularly when sensitive issues are involved and she wants to demonstrate her power, she has someone on her staff call for her rather than pick up the phone herself.

On the afternoon of Friday, Aug. 21, Chancellery chief-of-staff Thomas de Maizière (CDU) rang up Economics Minister Karl-Theodor zu Guttenberg (CSU), passing on Merkel's orders for Guttenberg to call US Treasury Secretary Tim Geithner before the board at General Motors made a decision on the future of Opel.

Maizière emphasized that it was important to get two key points across. Firstly that the German government favors the offer being made by a consortium made up of Magna, a Canadian-Austrian car parts supplier, and Russia's Sberbank to purchase Opel from GM. And secondly that GM would only be able to reckon with German financial assistance if it opted for this particular deal.

Guttenberg's response to this was cool. He indicated he didn't think very much of running the risk of provoking further displeasure in Washington by making a renewed attempt to get the US government to pressure GM to accept a specific deal the German government had chosen to back. In a voicemail to the Chancellery, Guttenberg said he wasn't going to have time to make the call at around 2 p.m. and that Finance Minister Peer Steinbrück could make it for him, seeing as he was in contact with Geithner on a regular basis anyway, and then hung up.

'Why Me?'

A few minutes later, Steinbrück's cell phone rang in the midst of election campaign activities somewhere in the western state of North Rhine-Westphalia. Maizière asked if he could call Geithner regarding Opel. "Why me?" Steinbrück asked back. Opel, he pointed out, was Guttenberg's responsibility. That's true, Maizière admitted, "but his relationship with Geithner isn't as good as yours."

Steinbrück did as he was told. Three times he tried to get through to Geithner. Three times Geithner called back. But somehow they didn't manage to conduct a conversation. Geithner was tied up in meetings and Steinbrück was in the hubbub of an election campaign tent.

That evening, Foreign Minister Frank-Walter Steinmeier managed to get through to his counterpart, US Secretary of State Hillary Clinton, telling her that Washington needed to exert influence on GM and that time was of the essence. Clinton listened patiently to what Steinmeier had to say before pointing out that she was not the right person for him to be addressing in this matter. But she promised to speak with Geithner about it once again.

Quicksand for the Government

This whole scenario shows that something's not working like it's supposed to with the German government's bid to rescue Opel. At the end of May, the leaders of Germany's grand coalition government -- which comprises Angela Merkel's conservative Christian Democrats and the center-left Social Democrats -- were slapping each other on the back in an atmosphere of optimism after a memorable late-night meeting at which they agreed to provide billions in government support to save Opel and to support Magna in its role as the investor.

At the time, Merkel rejoiced that the government had saved the Rüsselsheim-based auto giant from sliding into a maelstrom of bankruptcy proceedings. Steinmeier, the leading candidate for the SPD in the upcoming general election, gushed about "a good future for a new European automotive group". Three months and over €1 billion ($1.4 billion) in taxpayer money later, this future has become less certain than ever. Opel has turned into a quicksand for the German government.

• 1
• | 2
• | 3
• | 4
• | 5
• Next

• Part 1: How Merkel's Attempt to Save Opel Went Awry
• Part 2: Political Fallout
• Part 3: Considerable Defects
• Part 4: Change of Course
• Part 5: Dragging on Indefinitely