In response to the slowdown in the European car market, Opel is trying to reduce capacity by about 20%.
The car market in Western Europe in 2010 is expected to be 1.5 million vehicles below 2009 levels and nearly 4 million below peak sales in 2007, GM said. "It is not expected to return anytime soon -- if ever -- to these peak levels, resulting in significant overcapacity in general and at Opel in particular," the company said in a statement.
For more: GM will close Opel plant in Antwerp - MarketWatch
On Thursday, a friend described watching someone he knew repeatedly attempt and fail at an activity as “watching an animal slowly bleed to death.” I think the phrase also applies to following Saab’s final months. On Friday morning, General Motors ended the agony by announcing it was winding down the Swedish brand.
German officials denied Monday that they were trying to outbid other European nations in offering money to General Motors Co. to save local jobs.
GM's European executives are meeting with ministers from Germany, Britain, Belgium, Spain and Poland as well as European Union commissioners in Brussels to discuss how the company plans to cut capacity by 20 to 25 percent -- and likely shed thousands of jobs. Germany's deputy economy minister Jochen Homann said Germany "will not participate in a subsidy race" as other countries hint that they are willing to help the company pay the costs of restructuring the Adam Opel GmbH and Vauxhall units.
The small German town of Ruesselheim has not been happy with General Motors. Since GM's announcement that it would restructure German subsidiary Opel itself, rather than sell it off, Ruesselheim has been home to angry protesters calling GM's behavior "totally unacceptable" and "the ugly face of turbo-capitalism." In a move that may appease some of that anger, a GM spokesman announced Saturday it will move its European headquarters from the Swiss capital Zurich to Ruesselheim, Opel's current home. All but the headquarters of the Chevrolet brand will be included in the transfer, which should be completed before the end of the year, the spokesman said.
A senior German government official told General Motors Co. executives Wednesday that the U.S. automaker will have to cover the cost of restructuring its troubled German carmaker Adam Opel GmbH. Economy Minister Rainer Bruederle said he reiterated the position outlined by Chancellor Angela Merkel at a meeting in Berlin with Nick Reilly, GM's head of international operations, and John Smith, the chief negotiator in the Opel bid talks. Merkel told the lower house of Parliament on Tuesday that GM would have to rely on its own resources to restructure Opel. Mrs.Merkel said: "This solution can only work if GM takes over the lion's share of the restructuring costs, which also means that it has to pay back the bridging loan."
Note EU-Digest: If GM management continues dragging their feet and keeps coming back on its word, the next step should be for Germany to consider nationalizing Opel and continue with the original plan whereby Opel would be sold to Canadian and Russian interests to guarantee continued operations of Opel and German jobs.
German Blast GM For Delaying Opel Deal
German Economy Minister Karl-Theodor zu Guttenberg said he believed a deal was still possible and that talks would continue, but there were angry words from around the country where the carmaker has plants employing some 25,000. Juergen Ruettgers, premier of North Rhine-Westphalia, Germany's most populous state and home to the Bochum works, issued a statement saying the delay was "intolerable." "The United States government now shares responsibility for finding a way past GM's leadership weakness and helping us finally to reach a sustainable decision," he said. The German government, which is barely a month away from a federal election, has offered financial backing for Magna's bid because it believes it would be the best option to save jobs. Roland Koch, conservative state premier of Hesse, where Opel is based, said he was "extremely annoyed," by Friday's outcome. "All the relevant questions have been resolved between GM and Magna," he said. "There's absolutely no justification for this postponement."
GM Europe sales slump amid uncertainty
Sales of General Motors cars slumped in Europe during June, even as the broader auto market improved for the first time in 14 months, data released on Wednesday showed. Europe-wide, auto sales rose 2% in June, the ACEA trade association reported, as incentives to scrap old cars and buy new ones have spurred demand. Car sales in Germany jumped 40% and Italian sales rose 12%, even as those two export-oriented economies are continuing to be mired in recession.
Germany blames U.S. for scuttling deal on Opel
Reuters reported that the fate of German car maker Opel hung in the balance on Thursday after marathon talks on shielding it from the looming bankruptcy of its U.S. parent General Motors ended without a deal. German ministers told reporters after more than 12 hours of negotiations in Berlin that a bidding battle for Opel had narrowed to a two-way race between Italian car maker Fiat and Canadian auto parts company Magna.
The Germans blamed GM and the U.S. Treasury for the failure to agree a plan to tide Opel over until a deal with one of those suitors can be sealed. "We have made demands on the U.S. Treasury and expect answers by Friday and we will need these answers in order to agree a plan," Economy Minister Karl-Theodor zu Guttenberg said.
Finance Minister Peer Steinbrueck said he was hopeful a deal could be reached on Friday that would save Opel. But he spoke of "surprises and disappointment" with the U.S. negotiators, saying GM had shocked participants by announcing it needed 300 million euros in additional short-term cash. Roland Koch, premier of the state of Hesse where Opel is based, added: "I think we can say clearly that a big part of the problems tonight came from the combination of new figures from General Motors and a not very helpful negotiating stance from the Americans, from the U.S. Treasury." Guttenberg said insolvency remained an option for Opel if U.S. negotiators refused to budge.
U.S. tells GM to prepare for bankruptcy filing
The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported Sunday. GM (GM) is operating under emergency U.S. government loans. It has been told by the Obama administration's task force overseeing its bailout that it must cut costs and reduce its debts in order to continue to receive aid.
GM Bankruptcy Plan Developing as Board Seeks Savings - by Jeff Green
General Motors Corp. is speeding up preparations for a possible bankruptcy filing even as directors scout for deeper savings this week to avoid that outcome, people familiar with the plans said. GM would focus on forming a new company from its best assets if court protection is needed, said the people, who asked not to be named because the details aren’t public. The efforts to set a new cost-cut goal center on how to go beyond a proposal to slash debt by 46 percent and shed 47,000 jobs in 2009, and will include talks with Treasury officials, the people said.
The moves are a response to President Barack Obama’s March 30 rejection of GM’s bid to keep $13.4 billion in federal loans. With bondholders and the United Auto Workers balking at concessions, a push for more savings makes bankruptcy more “probable,” Chief Executive Officer Fritz Henderson has said.
Opel electric Car available 2011
For the complete report from BusinessWeek click on this link
Europe's Chevy Volt - by Paul Evans
Electric Car - Europe's Chevy Volt - by Paul Evans
After various sneak peeks and spy shots, we now have official pictures of the European version of the Chevrolet Volt. To be officially launched at the 2009 Geneva Motor Show, the left hand drive Opel/Vauxhall Ampera will go on sale late 2011 with a right-hand drive Vauxhall version available in 2012.
US Economy - The case for Chapt. 11 bankruptcy for car makers - by Kathleen Pender
Auto executives have painted a dire picture for their companies and the economy if they are denied $25 billion in federal loans and forced into bankruptcy.Yet many legal experts say that Chapter 11 bankruptcy, which lets a company restructure its operations and shed or rework many of its contractual obligations, is the best option for the automakers and for taxpayers if federal money is involved.Instead of lending to the Big Three car makers outside of bankruptcy, where the government would have little control and a low priority claim on the companies' assets, it would be better to let them file Chapter 11 and then provide debtor-in-possession financing.
DIP financing helps companies restructure their business and emerge from bankruptcy. It is usually senior to other debt and comes with a lot of strings attached. It would give the government a much higher claim on the companies' assets and more control over how taxpayer money is spent.
SolarWorld offers $1.26B for Adam Opel's assets - by George Frey
German solar energy company SolarWorld AG said Wednesday it plans to offer euro1 billion ($1.26 billion) in cash and credit for some assets of car maker Adam Opel GmbH, the German subsidiary of financially strapped General Motors Corp. GM said it wasn't selling. Bonn-based SolarWorld said in a statement it was planning to offer GM euro250 million ($350 million) in cash and another euro750 million ($945 million) in credit lines in a bid for four German production facilities and Opel's Ruesselsheim development center and headquarters, to make it Europe's first true "green" auto company.SolarWorld said it would develop a new generation of energy efficient and reduced emissions automobiles alongside successful models that Opel currently produces, should a deal work out. "With the restructuring of the product pallet, the traditional German auto builder would offer in future especially electric and hybrid automobiles and the newest technology combining extended-range electric and combustion motors highly efficiently," SolarWorld said.
