The "bugbear" Opel Insolvency

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

The grand coalition openly argues over the Opel case. While the bidding war is coming to a head, Foreign Minister Steinmeier and the works council are annoyed by the "talk" of a possible bankruptcy of the car manufacturer.

Immediately before the decision on the possible takeover of the car manufacturer Opel, an open dispute broke out in the grand coalition about the procedure. Vice Chancellor Frank-Walter Steinmeier (SPD) distanced himself from Economics Minister Karl-Theodor zu Guttenberg (CSU), who had supported the carmaker's bankruptcy as a possible solution.

Another ministerial round will meet in Berlin this Monday to discuss Opel’s future. There are three offers to take over Opel - competitors are the Italian auto company Fiat, the Austrian-Canadian supplier Magna and the US investor Ripplewood. The decision has to be made this week, as the future of the American parent company General Motors (GM) should also be clarified by the end of the month. Magna and Fiat want to improve their offers.

Real bidding competition welcomed

Steinmeier told the dpa news agency on Sunday: "I advise everyone to finally stop talking about the bankruptcy of Opel." The federal government must focus all its energy on saving as many jobs as possible at the car manufacturer, "instead of constantly dealing with new bogeymen". Steinmeier welcomed the fact that there was a real bidding competition with the automaker. This benefits the employees and helps to limit the risks for state aid.

Guttenberg considers the offers that give Magna the best opportunities so far as insufficient. The minister said “Bild am Sonntag” that there were three offers, “but that does not mean that one of them will automatically and compulsorily take effect. Before doing so, we must have a high degree of certainty that the considerable tax resources that we have to use for this will not be lost. In my opinion, none of the three offers has yet sufficiently guaranteed this security."

The consequences for the minister are clear: "If these deficits remained, an orderly bankruptcy would be the clearly better solution - it could also open up opportunities for Opel's future," Guttenberg told the BamS.

Criticism also from the works council

Opel general works council chairman Klaus Franz was outraged by Guttenberg. He told the "Bild" newspaper: "It is incomprehensible and completely counterproductive how the minister can now speak of bankruptcy. After all, there is strong interest in Opel from several quarters. " The auto expert Ferdinand Dudenhöffer told the "Hamburger Abendblatt": "The example of Saab shows how dramatic a bankruptcy can have." The already insolvent GM subsidiary Saab had to accept an 80 percent drop in production in the past four months. "The German politicians have already lost a lot of time at Opel," said Dudenhöffer. One could not allow one more day of delay.

Hesse's Prime Minister Roland Koch (CDU) demands more financial commitment from those interested in Opel. «It cannot be that all risks are covered by the state», Koch told the «Handelsblatt»: «We want to have motivated entrepreneurs as new owners who know that they decide on a lot of taxpayer money if they run the company well or badly. The best way to show this motivation is to risk something yourself. Fiat's improved concept did not change the preference for Magna.

What will happen to the jobs?

Fiat boss Sergio Marchionne has now given the employees extensive guarantees in the event of an Opel takeover. The "Bild am Sonntag" said the Fiat boss: "In the worst case scenario, a maximum of 2,000 jobs in Germany would be affected by the integration of Opel into a debt-free joint venture with Fiat." In his words, Fiat is committed to "all applicable labor law provisions in Germany, in particular the Works Constitution Act and co-determination."

According to information from the dpa news agency, the Magna concept plans to cut 2600 jobs in Germany - 2200 of the around 5000 jobs there in Bochum. However, Prime Minister Jürgen Rüttgers (CDU) and the Bochum works council had unanimously rejected this at a meeting with Magna managers on Saturday in Bochum. This means that the plant no longer has any perspective, quotes the “Welt am Sonntag” quotes from the Bochum works council boss Rainer Einenkel.