Thursday May 28, 07:34 PM
Opel prompts mini diplomatic crisis: analysts
By Lenaig Bredoux
FRANKFURT (AFP) - The future of German car maker Opel stood Thursday at the centre of a diplomatic poker game between the United States, accused of sabotaging the talks, and Germany, focused on upcoming elections, analysts said.
The tone rose to a point where after eight hours of overnight talks in Berlin, Foreign Minister Frank-Walter Steinmeier promised to bring up the issue with his US counterpart, Secretary of State Hillary Clinton.
"Opel has begun to weigh on Germano-US relations. The Germans don't feel they are being taken seriously by the Americans," a professor specialising in the auto industry, Stefan Bratzel, told AFP.
At the talks on Wednesday evening, GM (NYSE: GM - news) announced at the last minute that it needed an extra 300 million euros on top of the 1.5 billion euros (two billion dollars) in emergency aid that the German government had agreed to.
Washington, meanwhile, had sent only a technical advisor to talks with German officials and representatives of GM and the companies bidding to buy a stake in Opel.
German Economy Minister Karl-Theodor zu Guttenberg said the US government "could have made more of an effort" with its choice of representative.
In general, the US attitude was qualified in Berlin as "not very transparent."
Auto analyst Christoph Stuermer from IHS Global Insight added: "I think there was also a significant language barrier. I don't know if that envoy of the US Treasury spoke a word of German or if he had even ever been here.
"That clearly points to the fact that the American side did not take this seriously enough."
From the German side, deputy economy minister Jochen Homann is also not known as a fluent English speaker.
Berlin has welcomed good relations between Chancellor Angela Merkel and US President Barack Obama, but the economic interests of both sides are not the same in this case.
The US has made a major effort to keep GM afloat with billions of dollars.
"Next to that, 300 million euros more is not a big deal" and Opel is a minor issue compared with what is turning into a nationalisation of GM, Bratzel said.
Berlin meanwhile is headed towards general elections in late September, which is hobbling the ruling coalition of the conservative CDU party and social democrats from the SPD.
"If we did not have elections in September, the matter would have been settled a long time ago," commented Willie Dietz from the German Institut fuer Automobilwirtschaft.
"No politician would have dealt with it and Opel would have declared bankruptcy."
But Berlin and Washington do have at least two things in common, including promises by both Merkel and Obama to workers that they would not be abandoned.
"From the point of view of both GM and Germany, it's political as well" as economic, noted Metzler bank analyst Juergen Pieper.
An Opel bankruptcy would also be bad news for both sides.
With 25,000 jobs on the line, German politicians could face a backlash at the polls, while the US Treasury, which may soon own a majority stake in GM, does not want to lose control of its European assets, which some analysts call GM's "pearls".
Berlin has said it is confident of reaching an agreement when talks resume on Friday.
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