Saving German jobs
May 30, 2009
Following the announcement of the deal between Opel and Canadian-Austrian car parts maker Magna, Merkel said she had spoken with US President Barack Obama on Friday and that they had agreed to do "everything they could to find a positive solution to a complex situation."
With Magna pledging to keep all four German Opel factories open, it appears that Merkel has found the positive solution she was looking for - although some may find it almost as complex as the problem it tries to solve. The agreement includes a 1.5-billion-euro ($2.1-billion) bridge loan from the German government aimed at preventing Opel itself from going bust before Magna can make its financing available.
Magna's bid, meanwhile, is to be bankrolled by Russia's state-owned Russian Sberbank, which will consequently gain a 35-percent stake in Opel. And Berlin will provide 4.5 billion euros in loan guarantees for Magna and Sberbank. All of this is meant to help Opel gain autonomy from its beleaguered parent company GM.
Breaking new ground with new money
The investment of so much Russian capital - Magna plans to put in 700 million euros - into a German company is an unprecedented move. According to Hans-Henning Schroeder of the German Institute for International and Security Affairs, the financial deal can be attributed to an upcoming general election in Germany this fall.
"Opel is certainly a strategic enterprise, but it is only one of four German automakers and is neither the biggest nor the most important," Schroeder said. "The most important thing as elections approach is the jobs, and if Sberbank is ready to inject the money, one is inclined to accept."
It has not, however, always been so. As a matter of fact, Germany has something of a reputation for being suspicious of foreign investors. Since 2008, the government has even had the power to veto the purchase of stakes in German companies of 25 percent or higher if the funds are linked to foreign governments.
Strictly business
But Andrew Wilson of the European Council of Foreign Relations says the situation is a fundamentally different one when jobs are dangling in the balance so close to national elections. "Money doesn't smell at election time," he said.
And the deal is not strictly an act of benevolence on the part of Sberbank either. Moscow is keen to protect Russian car manufacturers from foreign competition and already has plans for a tie-in between Opel and its ailing domestic carmaker, GAZ.
tkw/dpa/AFP
Editor: Toma Tasovac