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GM's chairman says EU concern prompted decision to keep Opel

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GM's chairman says EU concern prompted decision to keep Opel

PAUL MCVEIGH

AUTOMOTIVE NEWS EUROPE

NOVEMBER 11, 2009 10:58 CET

General Motors Co.'s board revisited its decision to sell Opel after European Union regulators questioned whether Germany had favored Magna International Inc. in a bidding contest for the U.S. carmaker's European operations, board chairman Ed Whitacre said.

GM's decision earlier this month to keep Opel has angered German workers and politicians who had favored a sale of Opel to a group led by Canadian supplier Magna. The GM board had initially endorsed the sale of a 55 percent stake in Opel to Magna and its Russian partner Sberbank in September.

Belgian investor RHJ International also bid to buy a majority stake in Opel. Some GM executives were reported to prefer RHJ's bid over Magna's because it offered GM the chance to buy back Opel at a later date.

Whitacre said GM's board returned to the Opel issue in November after the EU competition commission raised concerns that Germany had tipped GM's decision in favor of Magna by offering financing exclusively to Magna in a bid to save German jobs.

EU catalyst

In October, EU Competition Commissioner Neelie Kroes wrote to the German government, saying GM should be allowed to reconsider the Opel bidding process because of indications that an offer of 4.5 billion euro ($6.71 billion) state aid was made only to Magna's bidding group.

"The catalyst for all this was the EU saying you only made the money available to one investor," Whitacre said. "The board did what they should have done and revisited the issue."

He added: "We had to ask ourselves how we could be a global player and not play globally."

About half of Opel's 50,000 workers are based in Germany, including the complex at its Russelsheim headquarters that has spearheaded the engineering on key upcoming GM models.

Whitacre defended GM's decision to keep Opel and its UK sister brand Vauxhall.

"It's been a confusing decision, but I don't think it was handled badly," Whitacre said. "The circumstances changed from the time this started. The financial part of the business got better. Conditions have changed."

Whitacre was speaking Tuesday in Texas. His comments were the most detailed he has made on GM in public since he became chairman of a reconstituted 13-member GM board when the automaker emerged from bankruptcy in July.

Reuters contributed to this report

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Whomever thought up this plan, well it was just pure genius. That person had to know that the different European countries would start to fight over this and then run to mom (EU Competition Commission) to settle it. All the while GM would be playing one country against the other. He had to know how the German government and the EU would react to each other. All the while he knew it would never be sold. Genius pure genius ... :smilewide:

Edited by Pontiac Custom-S
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Whomever thought up this plan, well it was just pure genius. That person had to know that the different European countries would start to fight over this and then run to mom (EU Competition Commission) to settle it. All the while GM would be playing one country against the other. He had to know how the German government and the EU would react to each other. All the while he knew it would never be sold. Genius pure genius ... :smilewide:

:yes:

Like I posted earlier, Magna might even have been a willing foil in this farce to stall the decision while GM got its act together (bankruptcy) and reset its pieces on the chess board.

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:yes:

Like I posted earlier, Magna might even have been a willing foil in this farce to stall the decision while GM got its act together (bankruptcy) and reset its pieces on the chess board.

You wonder why Magna walked away so quietly and has not said much since it happened? Recall how when dealers found Pontiac was going to be killed how they reacted and were ready to purchase the brand? Recall how Roger Penske reacted about Saturn? Notice Magna just quietly walked away. Then notice too how this whole thing exposed the traitors or trouble makers in GM Europe?

It exposed them all. GM knows the enemy and where they stand with Germany.

PCS I assume is saying he was behind this or knows who it was. I was told some of the board of directors felt Opel was being sold for little of nothing, and strategically, holding to Opel would help GM globally long term.

It is too integrated into GM.

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Great chess from GM. I am impressed the with the level of non yielding politics GM has played in the entire game since it went bad in September.

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