Say brother, can you spare a billion?

In the latest dispatch of Portnoy’s Stammtisch, The Local’s column about life in Germany, Portnoy explains why carmaker Opel deserves to be bailed out – but other Teutonic firms don’t.

Say brother, can you spare a billion?
Photo: DPA

The global economic crisis and bad management have put two of Germany’s biggest automotive companies – Opel and Schaeffler – on an Autobahn to destruction.

While Chancellor Angela Merkel appears to be trapped in their headlights, her blue-blooded wunderkind – Economy Minister Karl-Theodor zu Guttenberg – has to decide who gets a taxpayer-funded lifeline and who gets sent down Insolvency River.

Though the two cases might seem similar – one company makes cars and the other parts for cars – there are a number of compelling reasons for bailing out Opel and just as many for ignoring Schaeffler’s pleas for help.

For the uninitiated, Opel is a subsidiary of General Motors Corp., a US carmaker that may or may not survive the next few months. GM’s troubles are threatening to take its German unit down with it and Opel executives, unions and workers want the German government to help.

Merkel’s conservative Christian Democrats are sceptical, saying Opel may no longer be a viable company – but her coalition partners, the centre-left Social Democrats (SPD), for the most part think Berlin should pony up a several billion euros to help make Opel a sustainable and independent German carmaker.

At the risk of sounding like I’ve become an anti-American pinko interested only in saving a bloated Teutonic company from Detroit’s evil clutches, the conservatives have got this one wrong and the SPD is right.

In addition to an apathetic, distant Yankee parent, Opel’s real problems became embarrassingly apparent last week when its managers reportedly handed over a hackneyed, poorly developed rescue plan to German politicians. The best Opel executives could do when the pressure was on and billions in government aid were at stake was to hand over a piecemeal, half-English document full of marketing half-truths and advertisements? That’s leadership? No wonder Opel’s in trouble.

But that’s also the reason the once proud German automaker may be able to make a go of it on its own – despite the apparent lack of brainpower at the top, the company was still able to peddle 1.5 million cars last year. That’s about the size of France’s Renault and slightly smaller than Italy’s Fiat – which are certainly both viable companies. Imagine how Opel could do with some quality management detached from the woes of woeful GM.

And that’s not the only reason Opel deserves taxpayer billions – there are more than 25,000 Opel workers in Germany. If Opel goes under, these people will immediately join the government payroll (read dole), probably until they die. I’d much rather give them some cash now in the hope that they don’t become a permanent drain on my already heavily taxed paycheque. Heck, I might even buy some Opel stock if it ever became publicly traded.

Now, the critics are already whining that government intervention would artificially influence competition, but such complaints have little merit to anyone in the know.

Lower Saxony already owns 20 percent of Opel rival Volkswagen to make sure the state has at least some leverage on the state’s biggest employer. So why can’t Berlin (or Hesse or North Rhine-Westphalia) hold 20 percent of Opel? Ideally, if the company survives, some day the state and federal governments holding shares of Opel can sell at a profit.

It might seem that this logic should also apply to Schaeffler, essentially a ball-bearing maker that is now wrestling with something like €12 billion in debt. It collected the liabilities as part of an ill-advised takeover of Continental, which makes car brakes and tires. But unlike Opel, these businesses themselves don’t actually need the government’s help to survive. Rather the billionaire family Schaeffler needs a helping hand from the state to make sure they remain in control of the companies. In other words, the government should help them clean up a mess of their own making.

But why should Berlin do that?

My ideas for Schaeffler aren’t anything revolutionary or new, they’re actually what’s in the works. The same banks that egged faux-countess Maria-Elisabeth Schaeffler to buy Continental and loaned her all that money are about to pull in the collateral and take control of both Schaeffler and Continental.

Which is exactly what should happen – Schaeffler and her son don’t deserve any help for making such a sophomoric business decision and the banks need to suffer too. If they take over the companies, rather than interest payments they’ll now have to wait for markets to recover to recoup their costs – proving that they never should have supported the deal in the first place.

And once the ownership of Continental and Schaeffler is settled, these two mostly healthy companies can focus on what they should be focusing on – adjusting to the new economic situation and, hopefully, negotiating car parts contracts with a newly independent Opel.

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US reclassifies Switzerland: What does it mean for American travellers?

America’s public health agency eased travel alerts for dozens of countries this week, including Switzerland. But does it mean that people from the United States can now travel here?

US reclassifies Switzerland: What does it mean for American travellers?
Not yet, but hopefully soon. Photo by Jan Rosolino / Unsplash

Switzerland in early June announced vaccinated travellers would be able to come on June 28th. Therefore, this story is now out of date. Please click here for more information. 

Due to massive vaccination efforts around the world, the US Centers for Disease Control and Prevention (CDC) lowered travel warning levels  for more than 110 countries and destinations, including Switzerland.

From the highest level four previously, which means all travel is discouraged, Switzerland was ‘promoted’ to Level 3, allowing travel for fully vaccinated individuals.

In total, 14 countries, including Switzerland’s neighbours France and Italy, have been reclassified to a lower level.

Does this mean American tourists can now come to Switzerland?

Even though the CDC has cleared travel for vaccinated US residents, it doesn’t mean they are now allowed to enter Switzerland.

For the time being, travel ban is still in place for most third countries, including the United States. The only exceptions are Swiss citizens or permanent residents returning to Switzerland.

READ MORE: When will Americans be allowed to travel to Switzerland again —and vice-versa?

There are some other exemptions as well, including people whose presence in Switzerland is absolutely necessary to maintain the functioning of the healthcare system or public security and order, death of a close family member in Switzerland, and to continue essential medical treatment that began in Switzerland or abroad.

Each of these conditions must be proven with official documentation.

For other ‘special necessity’ rules, see SEM’s page.

Basically, this means that tourists or other random travellers can’t come to Switzerland at the moment.

There are, however, some promising signs that this restriction may be lifted.

Swiss president Guy Parmelin is scheduled to meet with his US counterpart, Joe Biden, on June 15th. Biden will be in Geneva for high-level talks with Russia’s president Vladimir Putin. 

It is not known what Switzerland and the United States will discuss at the meeting, beyond matters of importance to both nations, but there is a possibility that the subject of easing travel restrictions on both sides will be raised.

Also, under France’s new traffic light travel system, fully-vaccinated travellers can now enter France from non-EU countries, including the US.

This does not apply to Switzerland yet, but as the two countries share a border and both are part of the Schengen zone, Swiss entry regulations for US tourists might be relaxed in the near future — though not at this time.

Does this mean US residents can ‘slip’ into Switzerland through France?

Borders between the two countries are pretty porous and checks random at best, but if you attempt to get into Switzerland this way, you’d be breaking the law.

The only US citizens who can come into Switzerland legally right now are those residing in the EU/EFTA states, or one of the third nations deemed safe by public health officials:  Australia, New Zealand, Cyprus, Rwanda, South Korea, Singapore, and Thailand.

In other words, it’s not the nationality of a traveller that counts but their place of residence.

What about Swiss citizens going on vacation to the United States?

The US still has a ban in place for tourists from the EU, including Switzerland. It also has similar exceptions — that is, US citizens and permanent residents returning from abroad.

The US is forming expert groups to decide when to lift global travel restrictions that have been in place since March 2020.

However, this will probably take time and, despite mounting pressure from the travel industry and airlines, US-bound travel may not be on the horizon for this summer.

READ MORE: How to get Switzerland’s Covid-19 health pass