15th November 1999: Philipp Holzmann AG (founded 1849), the largest German construction company at that time declares a few weeks after its 125 year anniversary that it soon will run out of funding.
On 23th of November, bancruptcy was officially filed.
24th of November: Chancelor Gerhard Schröder "saves" the company with, among other measures, a 100 mn DM government guarantee plus a 125 mn DM credit line from KfW, the Government own bank.
21st of March 2002: Final bancruptcy filing of Philipp Holzmann AG after losing an undisclosed additional amount of money.
Certain similarities with Opel and the Automobile industry in 2009 are striking me:
- overcapacity in the industry
- company with long tradition but bad operational track record
- heavy political involvement at the very top of German Government
Another big domestic player in the construction industry, Walter Bau AG filed for Insolvency in February 2005, this time without major political involvement.
The two remaining competitors, Bilfinger and Hochtief however show a different picture. After excess capacity was finally reduced, their shareprices show a remarkable comeback between 2004-2008.
So what does this tell us for Opel ? Opel will be saved by the the politicians now, but:
- the competitors will suffer due to overcapacity
- Opel will file for final bancruptcy two or three years from now
- several hundred millions or even billions of tax payer money will be burned in the meantime
- don't buy automobile stocks now, only when capacity really goes away, the survivors will make money again. Although this might take some time.
