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Thread: German Government refuses Opel loan

  1. #1
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    German Government refuses Opel loan

    General Motors is hard at work restructuring its brands here in the U.S., but we mustn't forget about overseas divisions, like Opel, that still require some financial aid to get things up and running at full capacity again. As we reported last month, GM came to an agreement with Opel's German workers – labor heads have agreed to do without €1.26 billion in earnings over the next four years (approximately $1.59 billion), saying that the money is best saved for the development of Opel products.

    Now, more bad news strikes as the German government has denied GM's request for €1.1 billion ($1.3 billion U.S.) in loan guarantees for Opel. Rainer Bruederle, Berlin's economy minister, told reporters that he is "confident that Opel has a good future without credit guarantees," though labor unions are less than pleased with the final decision. Opel works council chief Klaus Franz went so far as calling the perceived snub "shameful."

    Still, GM is prepared to support Opel's restructuring with €1.9 billion in finances, though the automaker is hoping to seek out €1.8 billion in loan guarantees from different European governments, including the rejected €1.1 billion from Germany. Opel's restructuring is still taking place regardless of monetary support, but added financial aid would indeed help the process. Here's hoping.
    Source: autoblog.

    In my opinion, that's sad news for Opel. They are having enough problems by restructureing their company. I think i know why the german government did this, but i still think it wasn't right. If GM moves their production abroad to cheaper production countries, i couldn't blame them, but... well, what do you think?
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    Sucks for them. I guess the German government isn't as lenient as the US government.

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    In this case that would be an understatement. These are loan guarantees, not loans. That means if all goes well the German government pays out nothing. The US tax payer has certainly paid more than nothing.

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    Quote Originally Posted by culver View Post
    In this case that would be an understatement. These are loan guarantees, not loans. That means if all goes well the German government pays out nothing. The US tax payer has certainly paid more than nothing.
    This.

    Also, I'm hugely impressed with the german unions who agreed to cut their wages. If the UAW had been able to work with the companies that way...
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    Quote Originally Posted by culver View Post
    In this case that would be an understatement. These are loan guarantees, not loans. That means if all goes well the German government pays out nothing. The US tax payer has certainly paid more than nothing.
    Well... the german taxpayer has already paid huge sums to help a lot of companys. We've paid >400 Mrd. Euro to stabilize our economy- and remember, germany is a lot smaller than the US. BTW, our government has rather short money at the moment. They have just announced that the want to save a lot of money in the coming years (which means less money for us citizens), partly because of the economy crisis, partly because of the greece crisis. Giving loans (or even guarantees) to a foreign company (GM) would be heavily miunderstood by the people.
    Well, at least my state (Thuringia) voted for the guarantees
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    Quote Originally Posted by Commodore GS/E View Post
    Well... the german taxpayer has already paid huge sums to help a lot of companys. We've paid >400 Mrd. Euro to stabilize our economy- and remember, germany is a lot smaller than the US. BTW, our government has rather short money at the moment. They have just announced that the want to save a lot of money in the coming years (which means less money for us citizens), partly because of the economy crisis, partly because of the greece crisis. Giving loans (or even guarantees) to a foreign company (GM) would be heavily miunderstood by the people.
    Well, at least my state (Thuringia) voted for the guarantees
    I do understand this, but how bad would it be if Opel folded? Or moved major operations somewhere else? Still, your money, your vote.
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    I have the feeling the German government is (also) still unhappy for GM deciding to keep Opel at the last second last year (or was it at the beginning of this year?).
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    I guess Germany thinks they've already helped Opel enough. Also, as Commodore says, most Europe is rather broke so money to spend anywhere.
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    What I last heard is that NEW GM (of which Opel is a part) is making profits, in which case any new request for state support should be turned down. It will also be seen as contrary to European Competition rules.
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    Quote Originally Posted by henk4 View Post
    What I last heard is that NEW GM (of which Opel is a part) is making profits, in which case any new request for state support should be turned down. It will also be seen as contrary to European Competition rules.
    Were these same rules in place when they were giving so much support to Airbus?
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    Quote Originally Posted by wwgkd View Post
    Were these same rules in place when they were giving so much support to Airbus?
    that was just to compensate the support that Boeing is getting

    Anyway, GM has annouced that it has become so financially strong that it can afford to continue with Opel without any state support....we'll see.
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    If GM owns Opel, and GM has already been bailed out...then whats the problem?

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    I can't blame Germany for not being interested in giving cash to Opel. Now if I could just figure out why I have to give cash to VW...

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    The ironic thing is that Opel / Vauxhall must be one of the most profitable divisions of GM. Their European range (Corsa, New Astra, Insignia etc.) are much better than what Chevrolet (their direct equivalent) is offering in the US. The Aveo, Cobalt and Impala are all awful, awful cars that look and feel like they should have been replaced 7 years ago.
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    Sometimes good product does not equal big profits.

    I'm betting their most profitable divisions (or the ones that lost less money at least) must be GMC and Buick.
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