21 February 2010

I Said that This Would Happen

I said that there would be blowback when GM decided not to sell Opel and suck up all the state aid itself, and it appears taht I was right

We are now seeing that the taskforce reviewing GM's plans with Opel is saying that, they are inadequate, and aid should not be awarded:
General Motors’ restructuring plan for Opel/Vauxhall has been dealt a potentially serious setback on Wednesday after a German government taskforce said it had doubts about the scheme.

The US carmaker presented the turnaround plan for its lossmaking European operations last week and formally applied to Berlin for €1.5bn ($2bn) in loans or guarantees – the biggest portion of the €3.3bn it says it needs to finance its plan.

However, the federal task force advising Berlin on GM’s plans has deemed the proposals “unqualified for government loan guarantees”, three officials in German states with GM plants told the Financial Times on Wednesday.
(emphasis mine)

Part of the reason for this, though it is not explicitly spoken, is the belief that GM will strip mine Opel to support its US operations.

There has been a tepid denial from the board about this report, but I'm inclined to believe that they want guarantees that the money is not going to Detroit.

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