The Rebuff from Detroit: How the Opel Deal Went Sour

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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?"

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

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• Part 1: How the Opel Deal Went Sour
• Part 2: Propping Up a Poorly Managed Company
• Part 3: 'The Best Solution for Our Brand'
• Part 4: GM Still at Risk