When it comes to German automakers, Opel is way down on the list. Mercedes stands for luxury, BMW is sexy, Volkswagen represents affordable quality, and even Audi manages to hang with the big boys. But Opel? Most see the brand as a bit dowdy, the kind of car one buys more out of exigency than passion.
The German government spent most of Wednesday night in the Chancellery. The results, however, were few.Foto: REUTERS
These days, though, the entire country of Germany seems to have finally discovered a soft spot for the German car industry's awkward stepchild. With US automotive giant General Motors struggling to shed its overseas holdings in a last-ditch effort to avoid insolvency, the government in Berlin is desperately looking for ways to prevent Opel from collapsing.
But it is proving difficult. An 11 hour marathon of negotiations in Angela Merkel's Chancellery on Wednesday night ended in failure with the US coming up with a surprise demand for an extra €300 million ($415 million) on top of the €1.5 billion ($2.07 billion) in bridge financing the German government had already agreed to.
Furthermore, the list of potential investors in Opel continues to shrink. Earlier this week, the US financial investor Ripplewood Holdings, one of three companies to have made an offer on Opel, backed out. And on Friday morning, it was revealed that Fiat head Sergio Marchionne would not participate in an emergency meeting called by Merkel for Friday afternoon. Saying that his company was still interested in Opel, Marchionne said that Fiat's offer could not be improved absent a more detailed look at Opel's balance sheet.
Canadian auto parts supplier Magna is the third candidate, and according to participants in the ongoing negotiations, the one with the best chances for success. Opel board member Armin Schild gave voice to the developing consensus on German radio on Friday morning, saying the Magna plan is the most solid. He also made a plea for speed. "GM's insolvency is right around the corner, the hour glass is almost out of sand," he said.
The German government is concerned that, should Opel not be split off from GM in time, any state aid given to the company could end up flowing into Detroit's coffers. But absent a solid plan for Opel's future, up to 25,000 jobs in Germany could be in danger -- in addition to 25,000 others elsewhere in Europe.
Indeed, the situation has become so dire that Merkel no longer excludes the possibility of an Opel bankruptcy. In an interview with SPIEGEL, she said that it remained a possibility but that "we are doing our best to find a different solution." She also said that the US could be doing more to help. (Ed's note: SPIEGEL ONLINE will publish the full interview on Monday.)
Chancellor Merkel's government will give it another go on Friday. But German dailies are unclear as to who should bear the blame for the difficulties surrounding the ongoing talks.
Conservative daily Die Welt writes:
"If one can accuse the German government of anything, then it is this: In their hurry to attract as many offers for Opel as possible, they seemed to forget about the most decisive participant, the Americans. General Motors and the US Treasury are presenting a chaotic image. At the last second, a financing gap worth hundreds of millions suddenly appears, but there isn't a US negotiator worthy of the name present in Berlin. Whether that is an intentional tactic on the part of the Americans or merely dilettantism, nobody in Berlin seems to know for sure."
"It is, however, becoming clearer just how difficult it is to save a global company. The US government is being extremely careful that not a single cent of taxpayer money leaves the country. Such an overabundance of national egotism could make it impossible to find a solution for Opel."
The center-right Frankfurter Allgemeine Zeitung writes that German politicians have become too focused on general elections this autumn:
"The Americans are actually very much present in the negotiations, and they are very calculating. They are gambling with the insolvency of General Motors, and they aren't overly concerned that the German government wants to save the GM subsidiary Opel at almost any price."
"Accusations levelled by Social Democratic chancellor candidate Frank-Walter Steinmeier cannot draw attention away from the fact that his own promises of help during a campaign speech at Opel's factory in Rüsselsheim have robbed the German side of all of their trump cards. Those who calibrate their political compass according to public opinion surveys can quickly lose sight of the fact that the sale of Opel will be decided in Washington and not in Berlin. By focusing too much on the campaign, the German government has opened itself to extortion. This Achilles heel is currently being taken advantage of by the Americans, GM and Opel."
Center-left daily Süddeutsche Zeitung writes:
"In recent weeks, there has been much talk about investors, factory locations and tax money. But it seems that the situation in the US was forgotten. One cannot accuse the German government of not inviting enough people to the table. But in the ongoing contest involving politicians, investors, company representatives and union leaders, one can accuse Berlin of organizational incompetence."
"Indeed, when it comes to Opel, Merkel's coalition, concerned as it is about the approaching elections, is in danger of falling victim to its own attempts to save the automaker -- an attempt over which it actually has very little control. Merkel's government doesn't have the final say, the US government does. Berlin can hardly control the result, and yet will be held responsible. Should their efforts fail, most in Germany will accuse them of vast incompetence. Should they succeed, then Berlin will have established a precedent which will make it difficult to explain why the German government refuses to help in other, similar situations. Frank-Walter Steinmeier plunged the government into its current dilemma with his premature promises of help. Merkel saw little alternative but to follow. So far, their behavior has made neither Merkel's CDU nor Steinmeier's SPD worthy of an election victory."