Tag Archives: Magna

GM Drops Opel Deal with Magna and Sberbank

The board of directors of General Motors has decided not to finish the deal for the sale of carmaker Opel to a consortium of the Canadian Magna and Russian Sberbank. The has been a subject of investigation by the European Commission for illegal state aid.

The European Commission has said that it is now ready to examine any revised state-aid package that might be offered by the German government in the light of GM’s surprise announcement.

The German government has claimed that the financial aid for Opel was not conditional. I fail to understand, then, the reaction of Jürgen Rüttgers, premier of North Rhine-Westphalia, who said: “General Motors’ behaviour shows the ugly face of turbo-capitalism. That is completely unacceptable.” Rainer Brüderle, Germany’s new economics minister, has also said: “The behaviour of General Motors towards Germany is totally unacceptable.”

To my humble opinion the wording of the German reaction is utterly unacceptable itself. The German government has said in writing to the European Commission that the €4.5bn of government aid for the deal was not dependent on Magna and Sberbank being the winner, and is available to all bidders.

Is it available to all bidders or is it not available or what?

 

German Aid to Opel Was Not, Well, Conditional

On Friday Competition Commissioner Neelie Kroes had written to the German Economy Minister, voicing doubts about Germany’s offer to provide 4.5 billion euros in financial aid for Opel as part of the deal with Canadian Magna and Russian Sberbank. As Euractiv points out, the German government said repeatedly it had a “clear preference” for the Magna bid as it offered Opel the most promising future and would protect German jobs.

Now Germany’s government has written a letter to GM and the Opel trust assuring them that the €4.5bn of government aid for the deal was not dependent on Magna and Sberbank being the winner, and was available to all bidders. Quite convincing.

Frankfurter Allgemeine Zeitung explains that arguments for the deal have nothing to do with Community competition law. But of course. Community competition law is a decoration we wear when the weather is appropriate.