|
: As the week commences when General Motors is set to conclude a deal to sell Opel, its European arm, the American car giant finds that the European Union has thrown a spanner into the engine bay. Late on Friday, October 16 the European Union’s competition commissioner, Neelie Kroes, tentatively suggested what everyone else saw plainly when the bidding process for Opel concluded in early September: the winner got a big push from Germany that gave it an unfair advantage. Kroes belatedly has come to the conclusion that this might fall foul of the EU’s competition rules.
The potential area of dispute is over $6.7 billion of German state aid to Opel that was apparently only available if GM chose Magna, a Canadian car-parts maker, and its partners, Sberbank, Russia’s largest retail bank, and GAZ, Russia’s second-largest carmaker, to take over the business. Magna’s bid was alluring to Germany’s government as the Canadian firm promised to keep open all four of Opel’s factories in Germany with minimal job losses, regardless of their efficiency. This would look appealing at any time but saving German jobs was a priority as elections loomed at the end of September. Without a favourable deal for Opel Chancellor Angela Merkel may have suffered at the polls and thus found it trickier to pull together her favoured coalition.
Now Kroes suggests in a letter to Germany’s economy minister, Karl-Theodor zu Guttenberg, that the bidding process may have been a bit lopsided. Germany’s government had long made it known that it favoured the Magna-led consortium. Other companies with an interest in acquiring Opel dropped out as the race went on, including Italy’s Fiat, and GM settled on RHJ, a Belgian private-equity firm, as its preferred bidder. A deal with RHJ would have allowed GM to buy back Opel if its fortunes improved. Late in the bidding battle GM even emerged as a potential saviour for Opel itself, as rumours swirled that its improving fortunes after emerging from bankruptcy might allow it to keep and restructure its European arm. But Magna had captured the hearts of German politicians with their hands on the purse strings. Magna’s victory prompted immediate complaints from the British, Belgian and Spanish governments, which feared that Opel plants in their countries would be hit disproportionately by the deal. Now the indignation at Germany’s manipulation of the bidding for Opel has sparked some action from the EU. Kroes has...
| Single Page Format | 1 - 2 - Next |
Discuss this story on expressindia forums
|
|
 |
 |
 |
About Us | Contact Us | Advertisers | Site Map | Make us your homepage | Work for Us | RSS | Subscribe | Electronic Edition | Privacy Policy© 2009: The Indian Express Limited. All rights reserved throughout the world
