Fabulous Opel

            General Motors (GM) has decided to retain ownership of its heavily indebted Opel unit. The decision reverses GM's September tentative consent to sell a majority stake in its European Opel and Vauxhall operations to a consortium including Canada's Magna International Inc. and Russia's Sberbank.

GM's board decided to axe the deal after EU officials asked the company whether it would have agreed to the deal had it known Germany's 4.5 billion euros ($6.58 billion) in state aid would have gone to any buyer, Reuters reported on Tuesday. Instead GM is pursuing a 3 billion euro ($4.42 billion) restructuring plan.

Let us recall that under the terms of the deal, the "New Opel" consortium would have reduced GM to a 35% stake, Russian Sberbank was to take another 35% stake and the Canadian-Austrian parts supplier Magna was to about to obtain 20%, with the remaining 10% held by Opel's employees. Russian oligarch Oleg Geripaska's GAZ plant was to become the "industrial partner" to pay nothing into the venture, though offering its car factory in RF to produce Opel cars there.

That is why GM's abrupt decision caused the rush of indignation in German and Russian media, unlike the US and UK sources. The BBC News article makes a thorough analysis of the situation to conclude that "car analysts were not too surprised by GM's announcement". All this happened only due to their had financial situation, and Magna International regarded this decision with favour, RIA Novosti reported. In the meantime, the German labour union IG Metall intends to stage a strike and is ready to stop the factory for several days to oppose the GM's decision. According to Deutsche Well, Fritz Henderson, the Head of Opel Germany, is extremely negative about the announcement as well. He believes the restructuring failure could end in Opel's bankruptcy.

On the other hand, the Russian journalists are questioning whether this deal was a fake from the beginning. Due to extraordinarily calm reaction of the authorities, the deal is believed to be more a political issue than a real venture. ITAR-TASS hastened to assure that the cancellation of the deal caused no harm to Russia, although  the Prime Minister's words towards GM were quite accusing. The Guardian story is quite bias, and make an emphasis on Putin's indignation over the American "original culture when dealing with counterparties".

However, let's try to learn some lessons out of this story.

What happened? The Anglo-Saxons played for Sberbank that tried to evade it by allying with Magna. However, Magna didn't back Sberbank up in the end as well, because it supported GM's decision. German labour unions threatened the company with strikes, but GM menaced back with making Opel bankrupt. The story has two aspects.

At first comes the geopolitical aspect. The Anglo-Saxon world seems to lead a cautious, but unreconcilable war which aims to make Russia unstable. In this case, they consider that they slow down the technical development of the enemy. This policy consistently proceeds for more than 200 years, and there's no point to expect that it will miraculously change in the next 20 years. That means the opposition of Anglo-Saxon world to Russia will go on. Forewarned is forearmed, that is why Russia has to take measures beforehand not to let anyone harm it in the crunch times. Apparently, Putin understood it, judging by his "scornful" remark about the takeover failure.

Second aspect is politico-economical. The Russian tried to buy a real item for dollars in the country that was minting these dollars. During the past 20 years nobody managed to do the opposite. The deals were crumbed as with Arabs, as with Chinese. It is a strange thing, but for dollars the one in USA can obtain only securities - shares, futures, treasury bonds, etc., nothing real. The Americans value their currency. Besides, there's a number of regulatory rules that forbid to sell the property under US jurisdiction for the other countries' sovereign funds money. That means the sales cannot be processed without US authorities' approval. The buying of shares to obtain the controlling stake won't do as well, because nobody sells shares now, they tend to sell obligations to sell shares. There's another law in the US that states it is not obligatory to supply the ordered goods upon sold futures, because it is enough to pay a margin between a contract price and the price on the delivery date. The Chinese understood these rules after several failures like Opel, and now they are trying to get rid of their $2 billion, investing in property that is still possible to buy for dollars (as in Africa, for example). But the more dollars they sell, the more dollars stay in the reserves. During the crisis, when customers prefer cheaper Chinese goods, China accumulates dollars faster than spends it. Such an inconvertible rouble from Russian fairy tales turns out.

However, so far the Russian authorities have not been selling the Russian property for currency anymore. Two years ago Putin declared that Russia didn't need paper money, if anyone wanted the gas fields, he should invest in gas-distribution networks. Ant it resulted in barter trade with Europeans: assets are exchanged for assets, not currency.

But in this case the Russian tried to buy a real venture for currency that is being minted abundantly in the US. The result is logical. The deal never happened.


Helena said...


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