SolarWorld serious about buying GM's Opel

SolarWord's first race car was developed for an Australian solar-powered car race by student engineers from the German university Hochschule Bochum.

(Credit: SolarWorld)

SolarWorld's offer to General Motors is no joke. The German-based solar-power company is serious about wanting to purchase GM's Opel division, SolarWorld CEO Frank H. Asbeck said Thursday morning on German radio.

SolarWorld announced on Wednesday that it's in the process of making an offer to General Motors for its Adam Opel (aka Opel) division for about 1 billion euros ($1.3 billion).

The initial announcement sparked a flurry of market, analyst, and media skepticism on Wednesday. Asbeck took to the airwaves to clarify his company's position on Thursday. (A transcript of the interview in German is posted on the radio station's Web site.)

Opel, which is part of GM Europe, includes four German factories and a development center in Russelsheim, Germany. SolarWorld is prepared to offer 250 million euros in cash for them, according to Asbeck, and has bank credit lines worth 750 million euros, if the German government provides a guarantee. But the company would also request additional state funds to compensate Opel's 25,000 German workers at about 40,00 euros per job, an estimated 1 billion euros.

GM, which is currently seeking a multibillion-dollar bailout from the U.S. government, publicly dismissed SolarWorld's offer on Wednesday.

"This is pure speculation. We are not going to comment on that. Opel is not for sale," Karin Kirchner, a GM Europe representative told Reuters.

But Asbeck told Deutschlandfunk radio on Thursday that he's getting contradicting signals from others inside GM.

When questioned about SolarWorld's lack of experience in automechanics, Asbeck responded that that auto know-how will come from the existing Opel employees. SolarWorld would supply solar modules.

Asbeck went on to say that the auto industry needs fertilization from another industry, and that vehicles of the future, like those with electric drives and hybrid drives, should not only be reserved for Japanese manufacturers.

SolarWorld is not entirely without automotive experience. The company sponsored and co-developed a high-performance solar sports car with a group of engineers from Hochschule Bochum, a German university that participated in the World Solar Challenge solar-powered car race in Australia in October 2007.

SolarWorld wants to develop Opel into "the first 'green' European automotive group" and "produce a new generation of vehicles with energy-efficient, low-emission drives," according to a company statement. It would specifically use the existing Opel model line, modifying it to include electric drive and hybrid electric vehicles.

[Grumpypaul]

GM may be saved by this sort of action. Other companies, upstarts or established ones, will be knocking on GM's doors to purchase this or that division. At some point GM will find that at least for the short haul, they'll be liquid enough to continue. Whether or not this SolarWorld deal will fly, and whether or not they can even build a viable salable solar powered vehicle remains to be seen, but GM should take the money and run. Although there are calls for a chapter 11 filing, I think that the filing could signal the end of the company, especially as we know it. However, if they don't make a deal with anyone, they most certainly WILL cease to exist.