RUESSELSHEIM (Reuters) — Opel’s senior labor leader threatened General Motors Co. that the European carmaker’s work force would not pitch in to reduce $1.2 billion in costs if Detroit retains control of Opel.
"The employees want to make sustainable contributions but not if we should return to 100 percent control under GM," Klaus Franz said on Thursday during a visit to Opel’s main plant here by German labor minister Olaf Scholz.
He refuted a report in the Wall Street Journal that GM could raise sufficient funds to both pay back a 1.5 billion euro ($2.14 billion) German bridge loan and finance the restructuring and operation of its former European operations until Opel can generate its own cash again.
Should GM’s board of directors vote in favor of financing a buyback of Opel, this would represent an abrupt departure from its previous plans to give away a majority stake in its European carmaker to either Magna International Inc. or RHJ International SA in exchange for billions in government aid to prop up Opel.
"It’s not enough with just 1.5 billion or 2 billion euros. In order to pay back the bridge loan, GM needs to come up with $2 billion, and then there would not be a single cent left to invest in new products or restructuring the 25 to 30 percent of over capacity," he said. "To properly position this company you need 5 to 6 billion euros in the next couple of years."
Struggle for control
The Wall Street Journal reported that GM could contribute more than 1 billion euros of its own money to retain Opel, while governments in the U.K., Spain and Poland that are home to major manufacturing operations would finance another 1 billion.
In comments to German business daily Handelsblatt, the leader of Chancellor Angela Merkel’s conservative parliamentary faction in the Bundestag threatened that the government would call in its loan to GM that expires at the end of November.
"Should GM not want to sell Opel, then we will demand back our bridge financing of 1.5 billion euros," Volker Kauder said.
"We can only remind GM’s leadership once again that they should stick to the agreement reached a few months ago and negotiate a contract with Magna," the CDU parliamentary leader continued.
Analysts believe that Berlin has all but admitted defeat in its attempt to install Canadian supplier Magna and its partner, Kremlin-backed Russian lender Sberbank, as majority owners of Opel against the will of GM’s management and Detroit’s $50 billion benefactor, the U.S. government.
Nearly 25,000 people are employed at one of Opel’s four German plants and four times that number are estimated to have jobs here that depend on the carmaker, which is GM’s second-largest brand after Chevrolet with an annual output of more than 1 million vehicles.
Time to call Obama?
Ferdinand Dudenhoeffer, head of the Centre for Automotive Research at the University of Duisburg-Essen, believes GM wants to sideline and demoralize the German government by playing the various Opel countries in Europe against each other.
"GM is breaking down the will of the German government, so it will no longer be able to resist granting further state aid without losing the 1.5 billion and additional funding through a GM-planned insolvency of Opel," he wrote, adding that a failure of Opel would free GM of 4 billion euros in related costs.
"Only talks with (President Barack) Obama offer a chance. Everything else is condemned to fail. Everything else would make the chancellor and her economy minister regrettable losers," he wrote on Thursday.