Opel Moves to Break Away From General Motors | Germany| News and in-depth reporting from Berlin and beyond | DW | 27.02.2009
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Opel Moves to Break Away From General Motors

The head of General Motors Europe, Carl-Peter Forster, said on Friday that Opel would become a semi-independent company, adding that the stricken German carmaker needed 3.3 billion euros ($4.2 billion) to survive.

An Opel sign in snow

It will be the end of an 80-year partnership if the two carmakers opt to go seperate ways

Forster, said on Friday that the US company envisioned Opel becoming an "at least partly an independent business unit."

He also confirmed that Opel needed 3.3 billion euros to to help it through the current downturn in the car market. He made the comments at a press conference at Opel's headquarters in the western city of Ruesselsheim after presenting its board with a plan to save the German car maker.

Forster said GM Europe would present the plan to German authorities on Monday.

Earlier on Friday, German Economics Minister Karl-Theodor zu Guttenberg warned that the degree of integration between Opel and the Detroit-based GM would make Opel 's push to part company with its troubled US parent very difficult.

Instead, the economics minister called on GM to produce a viable business plan for Opel.

Berlin said Friday that the battle for Opel and its European operations would be raised at a European Union (EU) leaders' summit set down for Sunday.

Thousands of Opel workers took to the streets across Europe Thursday to demonstrate to save their jobs after parent company GM announced moves for a major shakeout in its international operations amid a deepening crisis in the global car industry.

In addition to Germany, GM has operations in Britain, Spain and Sweden. However, GM's Swedish SAAB company has already filed for bankruptcy protection.


Citing sources close to the German government, Financial Times Deutschland reported Friday, Feb. 27 that Opel's plant in the city of Eisenach might go to Mercedes-parent Daimler.

According to the report, the fate of another Opel factory in the western city of Bochum is still uncertain, while two more plants in Ruesselsheim and Kaiserslautern would remain part of Opel after it is spun off from its floundering US parent, General Motors.

However, speaking on German public broadcaster ZDF on Friday morning, the state premier of North Rhine Westphalia, Juergen Ruettgers, denied the rumors and ruled out a sale to the luxury car maker.

"I cannot imagine any scenario based on the closure of any plants," he insisted. State guarantees could be an option to help Opel implement a new business plan, he stressed.

"The state can make sure that Opel has a chance to implement this concept. Guarantees are one option, which we're not only using in the car industry," he said.

The options

An Opel car with a sign reading 'For Sale' is seen at a car dealer in Bochum

Is GM's Eisenach plant "zu verkaufen" -- for sale?

Ruettgers was likely referring to a restructuring plan to be presented in a meeting in Ruesselsheim of the Opel supervisory board later on Friday.

The plan is believed to be based on the company's separation from parent GM, which faces massive financial problems. This condition has been set by German federal and state governments for extending public aid to Opel, fearing that funding could otherwise end up in US coffers.


On Thursday, thousands of Opel workers demonstrated at the company's headquarters in Ruesselsheim, demanding that GM scrap plans for plant closures in Europe and calling for Opel's independence from its Detroit parent.

The global financial crisis has brought GM's European brands to their knees. Opel, 152 years old, with 25,000 workers and once briefly Germany's biggest carmaker, has been badly hit by dwindling demand and troubles in Detroit.

GM said Thursday that its European division had pretax losses of $2.8 billion in 2008. It has said $1.2 billion of costs need to be cut in Europe, where it operates Opel, Saab and Vauxhall in Britain.

Government split

Frank-Walter Steinmeier at Opel

Steinmeier: European plants could not be "thrown away like a squeezed lemon"

German Vice Chancellor Frank-Walter Steinmeier pledged his support at the rally but stopped short of offering any guarantees.

"This is about more than just Opel. It's about the future of the car industry in Germany. The car sector isn't just any ordinary industry here. It's the backbone of our economy," he said, but added that he opposed every form of protectionism.

"Do not listen to the sweet poison of the separatists, they are the gravediggers of employment ," he warned. "Opel needs open markets, too."

German leaders are split on how far the government should go to rescue Opel, with some politicians arguing the carmaker should be left to fend for itself.

Chancellor Angela Merkel told a news conference in Berlin this week that she had not yet seen the required restructuring plan to decide on any state help for Opel but that if it needed it, the priority would be financing guarantees rather than more direct state aid.

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