Opel’s “Brazilian Soap Opera” Roars to a Climax

German Chancellery: scene of long nights and stormy negotiations

You know, I never set out to be a financial news reporter, but this Opel-GM story has all the elements of good TV drama: political intrigue, complex characters, last-minute sleight-of-hand. It is indeed a soap opera, interspersed with commercials for the interested parties.

The waters got muddier yesterday when Sergio Marchionne, the Fiat chief (right), announced that his company would boycott Friday’s talks to preserve Opel. Fiat was still interested, yes, but not if it had to fork over another $415 million, a surprise turn of events, as we reported yesterday. Marchionne stated it was “unreasonable” for Fiat to negotiate for a company whose finances remain murky.

So, unless Sergio was playing high-stakes poker, the presumptive winner looked to be Magna, the Canadian parts company whose ability to bring more cash to the table came courtesy of a Russian bank. But Sergio said he was still interested, and Magna even offered a partnership proposal to Fiat—rather like Hitler did to Stalin at one point in WW II. So the plot continued to thicken.

Hold on, stop the presses. We just learned that Magna is apparently going to take a major stake in GM’s European operations, which include Opel. The company gets a bridge loan to sustain it through GM’s expected bankruptcy proceeding in the U.S. And the German federal and state governments will probably foot the bill.

I wish Marchionne had won. The guy is brilliant, a high-stakes negotiator, and a forthright car czar. In Montreal this morning he compared the German negotiations to “a Brazilian soap opera,” and so it has been. He told Der Spiegel in an interview that his company would be a much better fit for Opel than Magna, and I think he’s right.

The [Opel] plant in Eisenach is not just a highly efficient automobile factory, but also a symbol of German unity. However, Eisenach could operate even more profitably by working together with our Fiat plant in the nearby Polish city of Gliwice, instead of with its sister plant in Zaragoza, Spain. No parts supplier or financial investor can offer Opel such advantages, but an industrial partner from within the same sector can. That’s why a joint venture with us makes so much sense.

As he seemed to recognize, the politics—on both the American and German sides—got to be a bit too much. Whether Magna will preserve all of the 50,000 European jobs at stake remains an open question.

Don’t feel too bad for Sergio, however. He’s due to get Chrysler any day now, and that will be another soap opera.

Do you think Opel will continue as a brand under its new ownership?

—jgoods

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