General Motors may be dragging out a decision on the sale of Opel until after German federal elections in 30 days time, calculating that a new government in Berlin may drop its backing for Magna (MGa.TO).
Although negotiators hope a deal can still be reached before Opel premieres the next generation of its best-selling Astra at the Frankfurt auto show on September 17, analysts in Germany said the writing on the wall could not be any more clear.
The intelligent voter will have realized by now that Germany will not succeed and that GM is just being considerate in view of (the election on) September 27, said Peter Loesche, political science professor at the University of Goettingen.
By pushing the angle that GM could retain full ownership of Opel, management at the formerly bankrupt U.S. carmaker can now position its favored buyer -- financial investor RHJ (RHJI.BR) -- as a compromise for a German government that wants to see GM relinquish majority control.
While the White House was willing to plough $50 billion in aid just to resuscitate GM, Berlin mistakenly believed that guaranteeing billions of euros in loans to Opel gave it the upper hand versus a previously disgraced Detroit management.
Labour leaders think Berlin's fatal mistake was creating a trusteeship in which GM could veto any deal, rather that follow Washington's example and take a stake directly in Opel.
This construct called the Opel Trust has definitely proved to be a catastrophe. A chancellor who rescued Opel with a 1.5 billion euro bridge loan paid for with taxpayer money is running after a failed management, pleading with them. It's unworthy, Opel board member and trade unionist Armin Schild told Reuters.
GM is asserting its own interests as if its state-sponsored 11th hour revival in the emergency room was now ancient history, experts like Metzler Bank's Juergen Pieper say.
The circumstances at GM itself have changed considerably. There is no longer this extreme pressure where management had to accept whatever was dictated to them, he said.
I can certainly imagine that GM decided against Magna but it is being considerate enough to avoid embarrassing the German government before the election.
UNINTENTIONAL COVER FIRE
Fred Irwin, a board member of the Opel Trust who acts informally as a type of arbiter in the talks, has said he hopes an agreement can still be reached by the time of the Frankfurt auto show.
But while he has often criticized Berlin for throwing its entire political weight behind Magna's bid too early into the process, Irwin has not voiced any disappointment with GM.
So when Chancellor Angela Merkel showed understanding that GM's board did not approve a sale to Magna as expected last week imploring results over speed, some believe she was searching for a face-saving way to signal capitulation.
You can smell what's behind that. That is an example of fighting while on the retreat -- it is just about making it to September 27, Goettingen's Loesche said.
Auto industry expert Willi Diez believes the new government, that is expected to include the neoliberal Free Democrats, will want to return to the business of governing.
The world will be a different place after the election and the German government will have only one wish -- to get this issue of Opel off its table, somehow, said the director of the IFA institute for automotive studies in Nuertingen-Geislingen.
Time is definitely on GM's side, Diez explained.
Social Democrats are now accusing their conservative senior coalition partners like Economics Minister Karl-Theodor zu Guttenberg of unintentionally undermining Berlin's position.
You do not have to wonder why the Americans are waiting until after the Bundestag election, when Guttenberg presents expert opinions that advise against a Magna solution and continue to yak about an insolvency, Environment Minister Sigmar Gabriel told the Financial Times Deutschland on Friday.
(Additional reporting by Angelika Gruber; Editing by Rupert Winchester)