GM throws Opel sale into reverse, raising transatlantic questions
Guess the Germans didn't get what they wanted after all. Just weeks after the busy-bodies at the European Union questioned the fairness of the German government's bias in the GM-Opel-Magna-Sberbank deal, GM's new board of directors late today said it would chuck the whole deal.
The Detroit automaker (and effective ward of the federal government) won't sell a majority stake of its Adam Opel GmbH unit in Germany to a consortium of Canada's Magna International Inc., Russia's Sberbank and Opel's employees. Can't imagine who's angrier right now -- the German government, which had pledged to front $6.7 billion to finance a deal to save German jobs (if at the expense of the Belgians and the Brits)? German union leaders at IG Metal who saw in GM's bankruptcy a chance to separate their beloved Opel from the dolts in Detroit? GM management, who worked the deal with Magna-Sberbank because keeping Opel was said to be a less savory option -- and then got reversed in a boardroom reappraisal that wasn't expected, I was told by people close to the situation, to go this far?
"We understand the complexity and length of this issue has been draining for all involved," GM CEO Fritz Henderson said in a statement released late today, following a meeting of GM's directors. "This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future. While strained, the business environment in Europe has improved. At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured."
I can see the business logic in wanting to retain total control of Opel, the heart of GM's operations in Europe and a central cog in its global engineering and product development. But the political, personnel and PR ramifications? Potentially pretty extensive.
Did GM's 12-member board -- seven of which are new to the board and the auto industry -- overrule Henderson and his deal team, signaling a friction that could be de-stabilizing? Does the reversal imperil GM's relations with a new German government and create a minor diplomatic issue for the Obama administration? Or does GM's decision to go it alone go down easier with the new center-right coalition of Chancellor Angela Merkel, even if the looming restructuring may end up being more draconian than it otherwise would have been?
What about Opel's employees? From the earliest stages of this slow, painful divorce, a prevailing mood among the Opelistas was, in essence, "Great. Now we can get back to being a German automaker." But now the new boss will be the same as the old boss. How long can the existing top management at Opel expect to be kept around? Not long, I'd guess.
And, finally, how realistic is GM's assessment that the global conditions are stabilizing enough to justify keeping Opel? I've long thought -- especially after being based four years in Germany, the shadow of Opel -- that the value of the brand and some of its core competence was under-appreciated in Detroit. Can this apparent reunification, coming just days from the 20th anniversary of the fall of the Berlin Wall, open a less dysfunctional chapter in the long GM-Opel story? It should, given the difficult year just passed. But I'm not sure it will.
