Well, this is what happens when amateurs try to put together business deals. And by “Business Deals” I mean the wholesale multi-million dollar dismemberment of multi-national corporations.
General Motors Co., looking to finalize the sale of its Opel unit to Magna International Inc. as soon as midweek, may need to revisit the bidding process that led to the sale of its German unit after the European Union raised fresh concerns about that process, according to people familiar with the matter.
GM Chief Executive Frederick “Fritz” Henderson had hoped to sign the Magna deal last week, but regulatory issues have postponed the move. His plan for Opel—which met strong scrutiny from GM’s new board—was thrown into question late last week after the EU’s competition commissioner, Neelie Kroes, sent a letter to German Economics Minister Karl-Theodor zu Guttenberg saying GM “should have the opportunity to reconsider the bidding process.”
Mrs. Kroes pointed to “significant indications” that Germany had made €4.5 billion ($6.72 billion) in state aid for Opel contingent on Magna winning the bid, therefore violating EU state aid and market rules. EU rules restrict how governments can dole out aid, to prevent states from giving an unfair boost to one company over another in Europe’s common market. As competition commissioner, Mrs. Kroes must sign off on state-aid deals.
In short, according to international law, competitive bidding means one country can’t favor their won contries industries if the bids are to be competitive. Chancellor Merkel specified that Magna Industries — a German Company — had to win the contract. That’s illegal — yet the Obama Administration had no problem with that.
Berlin also opposed the idea of GM keeping and revamping Opel itself, one option GM’s board also considered. Under the preliminary agreement that GM reached with Magna last month, the Canadian auto-parts maker and its partners would acquire a 55% stake in Opel and its U.K.-based sister company Vauxhall. Opel employees would hold 10%, while GM would retain the remaining 35%.
“Employees” being the code-word for “Unions” here — just like it worked in the U.S. GM bankruptcy, too.
If GM were to consider another plan for Opel, German Chancellor Angela Merkel could then find herself in the awkward position of financing an outcome that slashed far more Opel jobs in Germany and shuttered some of its plants. Ms. Merkel and her conservative allies are eager to preserve the Magna deal ahead of critical regional elections next May in North Rhine-Westphalia.
GM’s go-it-alone Plan B would likely include thousands of more job cuts, and at least one plant closure or sale in Germany, say people familiar with the matter.
Makes you wonder what else was in the GM/Chrysler bankruptcies we haven’t even seen yet.
Imbeciles. no, no , worse than imbeciles — criminals.