Will a Machiavellian VW Plot to Buy GM’s Opel Today Lead to Wrestling Matches Tomorrow?
Tuesday, August 9, 2011 by admin
Can General Motors be bullied into selling Opel? That’s what seems to be going on in the German press with the latest revelations regarding GM’s embattled European brand, as reported by Bloomberg Thursday morning. A chronological narrative might be the better way to explain it, so let’s begin with the recent history that GM nearly sold 65 percent of the unit to a mix of supplier Magna International, Russia’s Sberbank and employees.
That deal was in the works prior to GM’s Section 363 bankruptcy. It was to be final late in 2009, after New GM emerged from the bankruptcy ashes. GM’s new management, led by Chairman Ed Whitacre, killed the deal, saying the company no longer needed German loan guarantees that were to be included in the sale. GM needs a major presence in Europe, after all, a shortcoming that Chrysler has suffered throughout the decades, including the nine years it was part of Daimler. Whitacre fired CEO Fritz Henderson that November in part because of the way he held on to the deal to sell Opel.
Like the rest of the European Union market, Opel has continued to struggle even as GM started to post profits again on the strength of sales in North America, China and elsewhere. Faced with high labor costs and labor unions that are far tougher than the United Auto Workers, Opel needs to keep a large portion of its production in Germany.
Now, GM is trying to make Chevrolet its international mainstream brand, including in Western Europe. Just as Chevy’s entre into China has made it possible to push Buick back up to the middle/upper-middle range there, where consumers revere that brand’s traditional prestige, the Chevy push in Europe helps GM’s effort to re-elevate Opel to where it was in the 1960s and ‘70s.
In mid-June, a year and a half after Henderson’s dismissal, Autobild and Der Spiegel printed rumors that GM Chairman and CEO Dan Akerson had grown tired of Opel’s lack of profitability, and was looking to sell the brand once again. The reports prompted an Opel union representative to demand that GM deny the rumors.
GM “has a longstanding policy of not commenting on rumors and speculation,” though amidst lots of pressure from union officials and others in Europe, it finally did on July 13.
“In Wednesday’s edition of the Frankfurter Allgemeine Zeitung, Volkswagen CEO Martin Winterkorn commented on rumors regarding Opel, which continues a regrettable pattern of fanning speculation as Opel makes solid progress in its restructuring,” the GM statement reads. That newspaper quoted Winterkorn as saying “that if Opel were for sale, a Chinese automaker would be more likely than Hyundai Motor Company to buy it,” David Welch reported in Bloomberg.
GM’s statement alleges Winterkorn’s comments were “timed to the incredibly positive media reaction to the groundbreaking Opel Ampera extended-range electric vehicle,” the brand’s version of the Chevy Volt. A “leading industry expert” said the Ampera places Opel three years ahead of VW, the press release reads.
There you have it. Opel and GM North America are too tied-in for the European brand to be sold. Beside getting cars like the Ampera, Opel is the center of much of GM’s compact and midsize development.
Ready for the punchline? Volkswagen AG has “communicated” a price to buy Opel from GM. And VW may have made the contact with GM in order to thwart any interest from Hyundai. This comes courtesy of Manager Magazin, quoting “unidentified VW managers,” according to Bloomberg.
Perhaps VW considers itself a Chinese company because of its sales success there?
GM has gone silent again, on this latest revelation. One insider says the report wasn’t even on his radar Thursday morning. Still, the implications are mind numbing. Imagine VW AG, which may pull the plug on SEAT if the Spanish brand continues to underperform, buying Opel.
VW Group has eight brands, including Porsche and not including heavy trucks. It’s as if GM in the late ‘50s had let Pontiac go, then bought Mercury from Ford Motor Company.
Seriously, though, think of how this little narrative describes Ferdinand Piech’s Volkswagen. If you believe any of GM’s explanation, VW, aware that German media would pounce on the stories, sparks rumors of an Opel sale. Winterkorn subsequently talks down Opel’s value just before VW makes an offer for it.
This story is another symptom of a big change in the ways that auto companies communicate. Not long ago, the mud flinging was done off-the-record, over cocktails. Smart auto execs knew the business was too volatile to criticize a rival for its problems, without risking similar, or worse problems to come back at them later.
Winterkorn’s scorn for Opel’s value came about a month after GM’s Akerson declared Ford’s Lincoln brand “over.” Now comes the revelation from an advanced copy of Bill Vlasik’s book, “Once Upon an Auto,” as reported in Jalopnik Thursday, that Ford’s Jim Farley, to paraphrase him Monty Python-style, would like to intercourse bloody Chevrolet.
Three years after the auto industry was turned upside down, the competitors are talking about each other much more baldly. Forget NASCAR as automobiledom’s WWE…wouldn’t Winterkorn v. Akerson and Akerson v. Farley wrestling matches be fun?
That deal was in the works prior to GM’s Section 363 bankruptcy. It was to be final late in 2009, after New GM emerged from the bankruptcy ashes. GM’s new management, led by Chairman Ed Whitacre, killed the deal, saying the company no longer needed German loan guarantees that were to be included in the sale. GM needs a major presence in Europe, after all, a shortcoming that Chrysler has suffered throughout the decades, including the nine years it was part of Daimler. Whitacre fired CEO Fritz Henderson that November in part because of the way he held on to the deal to sell Opel.
Like the rest of the European Union market, Opel has continued to struggle even as GM started to post profits again on the strength of sales in North America, China and elsewhere. Faced with high labor costs and labor unions that are far tougher than the United Auto Workers, Opel needs to keep a large portion of its production in Germany.
Now, GM is trying to make Chevrolet its international mainstream brand, including in Western Europe. Just as Chevy’s entre into China has made it possible to push Buick back up to the middle/upper-middle range there, where consumers revere that brand’s traditional prestige, the Chevy push in Europe helps GM’s effort to re-elevate Opel to where it was in the 1960s and ‘70s.
In mid-June, a year and a half after Henderson’s dismissal, Autobild and Der Spiegel printed rumors that GM Chairman and CEO Dan Akerson had grown tired of Opel’s lack of profitability, and was looking to sell the brand once again. The reports prompted an Opel union representative to demand that GM deny the rumors.
GM “has a longstanding policy of not commenting on rumors and speculation,” though amidst lots of pressure from union officials and others in Europe, it finally did on July 13.
“In Wednesday’s edition of the Frankfurter Allgemeine Zeitung, Volkswagen CEO Martin Winterkorn commented on rumors regarding Opel, which continues a regrettable pattern of fanning speculation as Opel makes solid progress in its restructuring,” the GM statement reads. That newspaper quoted Winterkorn as saying “that if Opel were for sale, a Chinese automaker would be more likely than Hyundai Motor Company to buy it,” David Welch reported in Bloomberg.
GM’s statement alleges Winterkorn’s comments were “timed to the incredibly positive media reaction to the groundbreaking Opel Ampera extended-range electric vehicle,” the brand’s version of the Chevy Volt. A “leading industry expert” said the Ampera places Opel three years ahead of VW, the press release reads.
There you have it. Opel and GM North America are too tied-in for the European brand to be sold. Beside getting cars like the Ampera, Opel is the center of much of GM’s compact and midsize development.
Ready for the punchline? Volkswagen AG has “communicated” a price to buy Opel from GM. And VW may have made the contact with GM in order to thwart any interest from Hyundai. This comes courtesy of Manager Magazin, quoting “unidentified VW managers,” according to Bloomberg.
Perhaps VW considers itself a Chinese company because of its sales success there?
GM has gone silent again, on this latest revelation. One insider says the report wasn’t even on his radar Thursday morning. Still, the implications are mind numbing. Imagine VW AG, which may pull the plug on SEAT if the Spanish brand continues to underperform, buying Opel.
VW Group has eight brands, including Porsche and not including heavy trucks. It’s as if GM in the late ‘50s had let Pontiac go, then bought Mercury from Ford Motor Company.
Seriously, though, think of how this little narrative describes Ferdinand Piech’s Volkswagen. If you believe any of GM’s explanation, VW, aware that German media would pounce on the stories, sparks rumors of an Opel sale. Winterkorn subsequently talks down Opel’s value just before VW makes an offer for it.
This story is another symptom of a big change in the ways that auto companies communicate. Not long ago, the mud flinging was done off-the-record, over cocktails. Smart auto execs knew the business was too volatile to criticize a rival for its problems, without risking similar, or worse problems to come back at them later.
Winterkorn’s scorn for Opel’s value came about a month after GM’s Akerson declared Ford’s Lincoln brand “over.” Now comes the revelation from an advanced copy of Bill Vlasik’s book, “Once Upon an Auto,” as reported in Jalopnik Thursday, that Ford’s Jim Farley, to paraphrase him Monty Python-style, would like to intercourse bloody Chevrolet.
Three years after the auto industry was turned upside down, the competitors are talking about each other much more baldly. Forget NASCAR as automobiledom’s WWE…wouldn’t Winterkorn v. Akerson and Akerson v. Farley wrestling matches be fun?
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