GM upsets Germans over Opel deal
A flag flatters in front of the headquarters of German carmaker Opel.
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Kai Ryssdal: German Chancellor Angela Merkel was on television today talking about the sale of General Motors' European unit, Opel. Her government is ponying up a lot of money to sweeten the deal for the eventual buyer. Part of what she's doing here is protecting autoworkers' jobs, and maybe her own, as German elections loom in September. But negotiations that have dragged on for months now aren't helping anybody.
From the European Desk in London, Marketplace's Stephen Beard reports.
STEPHEN BEARD: GM agreed in principle to sell a majority stake in Opel back in May. The most-favored purchaser: a Canadian car-parts maker with Russian backing.
The German government gave its blessing and promised more than $6 billion worth of finance. But GM is clearly balking at the deal. The company is apparently nervous about its technology winding up in Russia.
Analyst David Bailey says GM is now wondering: Do we really have to sell? Times have changed since May.
DAVID BAILEY: What we've seen is GM transformed into Chapter 11 and out again. Much of its debts have been written off. It's in a stronger financial position. It can see now potentially a plan for its European operations whereby it could work with its U.S. operations and make money.
But the German government and labor unions are disenchanted with GM, to say the least. They do not share the company's new-found confidence. They're still rooting for the Canadian/Russian deal, believing it's the best way to protect Opel's 25,000 German jobs. Analyst Professor Ferdinand Dudenhoeffer says the unions are threatening mass protests.
Ferdinand DUDENHOEFFER: They will go in demonstrations. They will go to the public. They will inform the public. They will ask the public to support. And that process will hurt the brand.
Hurting the Opel brand doesn't seem the best way to defend German jobs. But, says Dudenhoeffer, after three months of fruitless bargaining with GM, German anger has reached boiling point.
In London, this is Stephen Beard for Marketplace.