Opel, the German subsidiary of troubled US automaker General Motors, has begun currying favor with German state governments. Yet this might not be enough to save the company.
No one has come forward to buy Opel
Opel might not have enough assets left to be worth saving, according to an article in German news magazine Focus. Opel's patents, plant and real estate have already been mortgaged to the US government and US banks as security for loans, and could thus not be acquired by a new investor, an unnamed German minister told the magazine.
"Opel is just an empty shell," the minister was quoted as saying. "GM no longer has any authority over the assets."
He added that separating Opel from the rest of GM would be far more complicated and costly than anyone realizes. A new investor would have to negotiate the takeover with the US government and the banks.
Investors are interested
Opel's future has become a political issue
General Motors Europe chief Carl-Peter Forster says potential private-equity and sovereign-capital investors remained interested in buying into the European unit.
He told German magazine Spiegel that even if the GM parent company declared insolvency, production and sale of Opel and Vauxhall cars in Europe would continue as normal.
Forster confirmed that several investors from the private equity sector had expressed interest in buying into a new European consortium of companies backed with state aid.
Opel needs billions
Yet state aid might be hard to come by. GM's lifeline from US taxpayers expires at the end of June. If GM fails, Opel could collapse. Opel says it needs 3.3 billion euros ($4.4 billion) in government help to avoid financial ruin. The German subsidiary employs 25,000 workers.
"It would be irresponsible to allow Opel to collapse simply out of principle," the Rhineland-Palatinate State Economics Minister, Hendrik Hering, said last week.
He said his state plus Hesse, North Rhine-Westphalia and Thuringia could provide about 1.3 billion euros in aid according to the number of jobs at each production site.
Opel dealers and workers are also ready to chip in hundreds of millions of euros to save the company, whose survival has become a political hot potato as German politicians begin positioning themselves ahead of parliamentary elections in September.