Merkel Goes Nuclear: We Saved GM In Europe Then They Screwed Us. Where’s Our Money? | Mere Rhetoric

November 24, 2009

Despite that, GM’s board of directors’ gutsy decision to keep Opel within the corporation is good news for the long-term future of the automaker’s U.S. and European operations. But, returning Opel/Vauxhall to a profit will require thousands of layoffs and possible plant closings.

Tony Woodley, joint leader of Unite, the union, said the decision was “fantastic”, adding: “There is no logic in breaking up the company. I believe it is the right decision for Britain and our plants.”

He called on Lord Mandelson, the Business Secretary, to demand that GM give guarantees about future production.

Germany’s government estimated job losses of 10,900 under the sale of Opel/Vauxhall to Magna.

Chancellor Angela Merkel’s spokesman, said in a statement early Wednesday that the government expects GM to repay on time EUR1.5 billion in bridge financing meant to keep Opel afloat. That financing is due to expire Nov. 30.

In May, the German government pledged to help fund Opel with EUR4.5 billion, but suggested the financing was meant to support the bid to sell a majority of Opel to Magna and its Russian banking partner, Sberbank (SBER.RS).

Angela-Merkel-gm-opel

“Without our involvement there would be no Opel today,” Merkel told the Frankfurter Allgemeine (FAZ) daily in an interview to be published on Saturday. “We secured Opel’s chances of survival.” With US parent company GM struggling to survive, Germany gave Opel a “bridging loan” of 1.5 billion euros (2.2 billion dollars) to keep it running and Opel’s 25,000 German employees, half the European total, in a job. In September, GM signed a preliminary deal to sell a majority stake in Opel, a deal backed by the German government with three billion euros in state loan guarantees, but last month GM decided not to sell after all. With Merkel having invested considerable political capital in securing the deal, Berlin was not amused. It is now demanding that GM pay back the money. “Now that the final decision has been taken, GM now has to pay back the bridging loan … It has now taken over the responsibility of financing Opel itself,” Merkel told the FAZ.

You’ll be glad to know that GM’s European spokespeople were pretty cocky about repaying the loan: “if we’re asked, GM will repay the bridge loan in question.” Sure it’s infuriating to see them being generous with US taxpayer money as a way of brushing away their own incompetence. But (a) they’re already bragging about paying back US taxpayer debts with money from US taxpayers and (b) they already gave $1 billion in bailout money to Brazil. Given how much Brazil’s been flirting with Iran, it’d be churlish not to throw some money toward a reliable ally like Germany.

General Motors (NYSE:GRM) has opted to keep the European business Opel after a year of uncertainty and high-stakes political negotiations.

Now its clear that, GM was never keen on the deal with Canadian Mr. Stronach’s Magna International (TSE:MG.A) and his Russian partner Sberbank– it was forced into the decision by the Germans with the promise of $6.58 billion in state aid.

The proposed sale to Magna had threatened more than 10,500 jobs across Europe.

But GM said they had decided to keep Vauxhall and European car business Opel and “move forward with restructuring the business”.

Canadian multi-millionaire Frank Stronach’s lifelong dream of owning his own carmaker has been shattered for the second time in two years.

Despite that, GM’s board of directors’ gutsy decision to keep Opel within the corporation is good news for the long-term future of the automaker’s U.S. and European operations. But, returning Opel/Vauxhall to a profit will require thousands of layoffs and possible plant closings.

Tony Woodley, joint leader of Unite, the union, said the decision was “fantastic”, adding: “There is no logic in breaking up the company. I believe it is the right decision for Britain and our plants.”

He called on Lord Mandelson, the Business Secretary, to demand that GM give guarantees about future production.

Germany’s government estimated job losses of 10,900 under the sale of Opel/Vauxhall to Magna.

Chancellor Angela Merkel’s spokesman, said in a statement early Wednesday that the government expects GM to repay on time EUR1.5 billion in bridge financing meant to keep Opel afloat. That financing is due to expire Nov. 30.

In May, the German government pledged to help fund Opel with EUR4.5 billion, but suggested the financing was meant to support the bid to sell a majority of Opel to Magna and its Russian banking partner, Sberbank (SBER.RS).

Angela-Merkel-gm-opel


Merkel Goes Nuclear: We Saved GM In Europe Then They Screwed Us. Where’s Our Money? | Mere Rhetoric

November 24, 2009

You’ll be glad to know that GM’s European spokespeople were pretty cocky about repaying the loan: “if we’re asked, GM will repay the bridge loan in question.” Sure it’s infuriating to see them being generous with US taxpayer money as a way of brushing away their own incompetence. But (a) they’re already bragging about paying back US taxpayer debts with money from US taxpayers and (b) they already gave $1 billion in bailout money to Brazil. Given how much Brazil’s been flirting with Iran, it’d be churlish not to throw some money toward a reliable ally like Germany.

General Motors (NYSE:GRM) has opted to keep the European business Opel after a year of uncertainty and high-stakes political negotiations.

Now its clear that, GM was never keen on the deal with Canadian Mr. Stronach’s Magna International (TSE:MG.A) and his Russian partner Sberbank– it was forced into the decision by the Germans with the promise of $6.58 billion in state aid.

The proposed sale to Magna had threatened more than 10,500 jobs across Europe.

But GM said they had decided to keep Vauxhall and European car business Opel and “move forward with restructuring the business”.

Canadian multi-millionaire Frank Stronach’s lifelong dream of owning his own carmaker has been shattered for the second time in two years.

Despite that, GM’s board of directors’ gutsy decision to keep Opel within the corporation is good news for the long-term future of the automaker’s U.S. and European operations. But, returning Opel/Vauxhall to a profit will require thousands of layoffs and possible plant closings.

Tony Woodley, joint leader of Unite, the union, said the decision was “fantastic”, adding: “There is no logic in breaking up the company. I believe it is the right decision for Britain and our plants.”

He called on Lord Mandelson, the Business Secretary, to demand that GM give guarantees about future production.

Germany’s government estimated job losses of 10,900 under the sale of Opel/Vauxhall to Magna.

Chancellor Angela Merkel’s spokesman, said in a statement early Wednesday that the government expects GM to repay on time EUR1.5 billion in bridge financing meant to keep Opel afloat. That financing is due to expire Nov. 30.

In May, the German government pledged to help fund Opel with EUR4.5 billion, but suggested the financing was meant to support the bid to sell a majority of Opel to Magna and its Russian banking partner, Sberbank (SBER.RS).

Angela-Merkel-gm-opel


General Motors Requests A Bailout From The Government

November 14, 2008
now it all comes from your taxes

Forcing taxpayers to pay for bad business decisions is not the solution. Nor is it the American way.
G.M. poster via X RAY DELTA

photo

image via Greg Hergert