On ice
May 28, 2009
German Chancellor Angela Merkel chaired the emergency meeting, which was attended by a number of high-ranking German politicians including Economics Minister Karl-Theodor zu Guttenberg and the premiers of the four German states that are home to Opel plants.
Washington, on the other hand, seemed to consider the meeting to be a lower priority, sending only a low-ranking US Treasury representative, who reportedly contributed little to the discussions. Other Treasury officials are reported to have taken part in the proceedings via video conference.
The CEOs of the three main bidding firms, Magna, Fiat, and Ripplewood International, were also in attendance.
A potential fourth suitor, the Chinese carmaker Beijing Automotive Industry Holding Company (BAIC), is reported to have entered the race on Tuesday, but BAIC executives refused to confirm or deny their Opel bid.
Three-hundred-million-euro stumbling block
The goal of the emergency summit was to determine which company should eventually take over Opel. This was put on ice almost immediately, however, after GM made a surprise demand for further loans to keep Opel afloat for the time being. Reports said GM had asked for an extra 300 million euros, ($426 million) which is in addition to the 1.5 billion euros that Germany has already pledged.
The new demands were a source of considerable frustration for both Economics Minister Guttenberg and Finance Minister Peer Steinbrück.
After the talks, Steinbrück said it would be too dangerous to dump more money into a deal he called “unsafe” to begin with, adding that he couldn't allow German taxpayers' money to simply flow into the US parent company.
Or, as Guttenberg put it, “we have to at least be able to see the other shore before building a bridge.”
Ripplewood out of next round
At the end of the several-hours-long meeting, the parties involved agreed to continue negotiations on Friday, which are to include German and US government officials and representatives from GM-Europe and the two remaining bidders Magna and Fiat.
Ripplewood International, which had submitted a bid for the company last week, was determined to be a bad fit for an Opel takeover.
glb/AP/AFP/Reuters
Editor: Chuck Penfold