In Sochi, Merkel reaffirmed with greater emphasis the German government’s decision to hand over the Opel plants to a Russian-dominated consortium, despite an alternative U.S.-backed offer. The government in Berlin had taken a preliminary decision in Russia’s favor in late May, although the U.S. government had launched a rescue of Opel’s parent company, General Motors (GM) (EDM, June 4). Even as GM’s recovery prospects are improving, Merkel’s "relative preference" for the Russian deal in May-June became a "clear preference" at the August 14 meeting with Medvedev.
Berlin’s decision is bipartisan, driven by the coalition parties’ common Ostpolitik. It is also pushed by Christian Democrat-led governments in two German federal states with Opel plants that face job losses in the run-up to the elections. The "new Opel" consortium includes the Russian state-owned Sberbank, holding a 35 percent stake; the automobile producer GAZ in Nizhni-Novgorod, majority-owned by the Kremlin-connected, now-insolvent Oleg Deripaska, as "industrial partner" to the "new Opel," with no financial input; and the Canadian-Austrian parts-supplier company Magna (striving to become an automobile producer through the GAZ connection) with 20 percent and the operator’s role in this consortium. GM would retain 35 percent and Opel’s German employees 10 percent.
Belgium-based RHJ International, a European branch of the U.S.-based Ripplewood investment company, submitted a competitive investment and rescue offer for Opel shortly after the Russian offer. The German government has not ruled out RHJ’s offer, but made its preference clear for the Russian solution. Moreover, Berlin has agreed to support the Russian takeover with German government funds: 1.5 billion Euros in an emergency credit line to be followed by 4 billion Euros in loan guarantees (Handelsblatt, Financial Times Deutschland, August 14 – 17).
According to German press reports, GM (and the U.S. government behind it) prefers a partnership with RHJ to rescue Opel. The U.S. side is concerned that the Russian-led consortium might take over GM patents for engine and transmission technology and use them in unfair competition. This could result in a technological leap ahead of historic proportions in Russian automobile manufacturing at the expense of GM and its patents, whether their use is authorized or not. There are also concerns that Sberbank might later sell its stake to GAZ or another state-backed oligarchic conglomerate.
Even Volkswagen is concerned about these competition issues. Moreover, if Magna enters Opel, Magna could supply parts to Opel at preferential prices, undercutting Volkswagen on the German and international markets. Volkswagen’s management has warned in a public statement that it might retaliate by stopping its acquisitions of parts from Magna (Sueddeutsche Zeitung, August 15).
Qimonda, Germany’s largest manufacturer of memory chips is facing closure after a failed takeover by foreign investors. Dresden-based Qimonda’s failure potentially threatens the parent company, the Munich-based semiconductors producer Infineon, one of Europe’s largest microelectronics companies. Its majority-owner, Siemens, seeks a buyer for the loss-making Infineon. As in the Opel and Wadan cases, thousands of jobs are at stake in Infineon and Qimonda.
In their Sochi meeting, Merkel and Medvedev discussed a takeover of Qinona and potentially Infineon by the Russian Sistema conglomerate. The discussions were already ongoing "at a political level" (Kommersant, August 14) in the run-up to Merkel’s Sochi visit, although Infineon in Munich felt surprised by the news (Die Welt, August 15).
The tycoon Vladimir Yevtushenkov, brother-in-law of Moscow mayor Yury Luzhkov, is Sistema’s majority owner. Sistema president Leonid Melamed for his part is a long-time associate of Anatoly Chubais, author of the "liberal empire" concept while heading the Russian electricity monopoly. Melamed expects Sistema to be a key player in the Russian government’s plans to develop microelectronics in Russia by acquiring ownership stakes in more advanced Western companies (Reuters, August 14).
In that vein, Medvedev told Merkel that Sistema’s possible acquisition in Germany is of "strategic importance" to Russia. Nevertheless, Sistema’s subsidiary slated to acquire those German companies, Sitronics, is itself loss-making (Interfax, August 14). This situation might again necessitate German state credits or guarantees for a Russian "rescue" of Qinona and potentially Infineon.
Meanwhile, the Munich-based Siemens pursues a government-blessed plan to unite its nuclear-power division with Russia’s state monopoly Rosatom. The matter also came up at the Sochi meeting. In February of this year Siemens had broken up its long-time partnership with the French nuclear power company Areva for the sake of partnering with Rosatom. The latter is eager for technology transfers from the more advanced German company. In parallel, Siemens is negotiating an ambitious program for manufacture and delivery of locomotives and trains to the Russian Railroads state company.