Just as the debate is raging in the US about bailing out the auto industry, there is an equally contentious debate in Germany on the future of GM's subsidiary Opel. There seems to be a consensus that Berlin would consider loan guarantees to Opel IF the funds stay in Germany and are not sucked across the Atlantic to Detroit. Opel is seen in Germany as a victim of GM's mismanagement and the Wall Street collapse. Everything would be going splendidly if weren't for the "boese Amis". Opel boss Hans Demant told the press in Germany: "We only have a problem in
connection with our parent company in the United States." A local politician described GM as a "filthy locusts" (miese Heuschrecke), sucking the life out of its healthy German daughter and threatening the jobs of 50,000 Germans.
So now there are discussions of somehow separating the subsidiary from its ailing parent. Yesterday the financial markets were surprised by an offer from SolarWorld AG to acquire Opel from GM:
SolarWorld shocked markets on Wednesday when the 10-year old solar
energy company unveiled plans to acquire venerable Opel, which has come
under financial pressure because of the woes of its U.S. parent and a
sharp downturn in demand for cars.
"I see a need to overhaul our manufacturing sector. Just like we
have seen in the alternative energy area, the auto industry must be
overhauled. That means we need to build cars of the future — electric,
hybrid engines, this can't be left to the Japanese," Asbeck told
Deutschlandfunk radio.
"This is already in the heads of the developers at Opel, but they
must be freed from the restraints of General Motors," he added.
Another idea, put forward by the economist and German government advisor Peter Bofinger, is to nationalize Opel (temporarily). But this would also require that Opel somehow be separated from its parent GM.
Such a separation, however, is a pipe dream. Opel has been owned by GM for 80 years. In that period GM more than once had to rescue its subsidiary from collapse – most notably in the 1980s. Opel is completely integrated into the GM Group: this includes platform, R&D, distribution. Opel parts are manufactured throughout the GM network. More and more, GM has relied on its research center in Rüsselsheim for engineering innovation. GM's electric vehicle – the Chevrolet Volt – was developed in Rüsselsheim. Who owns the intellectual property?
A rescue plan for Opel must be part of a joint US/EU package. Right now, it looks like the Republicans in the lame duck Congress will block any direct aid to GM. They see a GM bankruptcy as a huge opportunity to destroy organized labor in the US, and deprive hundreds of thousands of GM retirees of both their pensions and health benefits. What happens to GM's European operations in the event of bankruptcy is anyone's guess. But it is sure to lead to tens of thousands of job cuts in Germany.
