Opel Watch: Who's On First?

Want to handicap the bidding war for Opel (and German bailout money)? Then be careful in your choice of news sources.

Germany’s mass-market tabloid BILD today declares that “RHJ is in the lead” for Opel. Magna has only “slim chances” to win. BILD’s supposed sources are in Berlin’s Ministry of Economics.

Also today, the Wall Street Journal writes: “Germany’s government sent a message to General Motors Co. on Wednesday: If GM sells its European car business to anyone other than Magna International Inc., then Germany might withdraw its offer of state aid.”

Wie bitte?

According to Reuters, Germany’s government has issues with BILD. “The report is wrong,” Jochen Homann, head of the government’s Opel Task Force, told Reuters. “A decision has not been taken in favor of one or the other bidder.”

The WSJ may be closer to the truth. Homann ominously added that the €1.5b in bridge financing is not linked to one bidder. But “future government guarantees would have to be negotiated.”

While Homan remained diplomatic, Roland Koch, premier of Opel’s home state Hesse, didn’t mince words: “The public guarantee negotiated with Magna does not automatically apply to the financial investor RHJ,” Koch said to Germany’s Handelsblatt. Yesterday, a speaker of Berlin’s government said that the total of €4.5b in aid has only be committed to Magna. “If another bidder is chosen, then the offered aid has to be reviewed.” So there goes the plan of GM to use RHJ as a strawman, collect government money, and then buy back Opel.

Says the WSJ: “A newly confident GM, emerging faster than expected Friday from bankruptcy proceedings, is growing cool on Magna after failing for weeks to bridge differences with Magna over issues including access to GM technology and world markets. GM’s preliminary, nonbinding accord with Magna in late May was “a shotgun wedding” under political pressure from Germany, said one person close to GM.”

GM doesn’t want Magna anymore, favors RHJ. To the RHJ bid, Berlin says: “you go ahead, but forget about the money.” Maybe they’ll split the baby and settle on China’s BAIC? Officially, they are still in the running. BAIC is “offering more cash and seeking less government aid than other bidders,” says the WSJ. But BAIC wants to truck Opel technology off to China.

So who’s on first?

Update: According to Der Spiegel, all states where Opel has plants shot down the RHJ offer. Kurt Beck, Premier of Rhineland-Palatinate: “Impertinence.” Jürgen Reinholz, Economic Minister of Thuringia: “Unacceptable.” All quiet at the eastern front: Nobody heard from BAIC.