When Green Wombat met with SolarWorld COO Boris Klebensberger last month, he noted that the German solar cell maker opened for business in 1998 just as oil prices hit an all-time low. “The company was founded by five crazy guys who people thought were on drugs, ” he laughed.
They still might. SolarWorld, now the world’s fifth-largest solar module manufacturer, has made an unsolicited $1.3 billion offer to buy General Motors’ German-based Opel division. And why would a renewable energy company want to get into a fossil fuel-dependent business? To build green cars, of course.
“The automotive industry is down a deep well and when you’re in a deep well you have to find a new product for the future,” SolarWorld CEO Frank Asbeck told Green Wombat as he was getting out of taxi Wednesday in Rome to attend the dedication of a SolarWorld solar array at the Vatican. “The next cycle will be renewable energy. The switch will be from automotive to electromotive, or as we call it, sunmotive.”
If the Pope can go green, why not another tradition-bound global institution?
If SolarWorld’s bid seems comically low for a century-old automotive powerhouse, consider this: As of Wednesday morning General Motors’ (GM) total market capitalization stood at $2.2 billion. That’s not a typo — Sergey Brin and Larry Page probably have that much rattling around the change drawers of their Priuses (TM). SolarWorld’s market cap, in contrast, is $1.6 billion.
The SolarWorld bid does come with a rather large catch, however. The company wants GM to make compensation payments of 40,000 euros (about $51,500) per Opel worker for a total of 1 billion euros ($1.3 billion) — what the automaker would have to shell out under German law if it shut down. Opel has been something of a jewel in GM’s crown, but it has suffered from its parent’s mistakes and now Opel executives themselves are asking the German government for a billion-dollar bailout.
GM has dismissed the SolarWorld bid out of hand while some financial analysts called the offer a PR stunt. If it was a joke, it’s been a costly one: the company’s shares initially plunged 19% after Jefferies questioned management’s credibility and downgraded its stock.
“We’re not making jokes,” Asbeck says. “We say we’ll give a billion and General Motors gives a billion. We are strong enough in renewable energy to give scale to old fossil fuel industry.”
While SolarWorld has no plans to make a sun-powered car like the experimental racer (pictured above) it built, Asbeck says the company would retool Opel to increase production of green cars by 5% each year, transitioning from plug-in electric hybrids like the Chevy Volt to all-electric vehicles. “We think extended range cars are the car for the next five years,” he says, noting that Opel management would be left in place but given a new mission.
SolarWorld’s chances of acquiring Opel might appear slim, but Asbeck’s strategy is sober. Just witness Silicon Valley startup Better Place’s success at signing deals with the governments of Israel, Denmark, Australia and California to build an electric car infrastructure and its alliance with Renault-Nissan to produce battery-powered vehicles. Even Ford (F) executive chairman Bill Ford has been developing a green strategy for the auto industry, according to The New York Times.
“I think that times have changed and we as a solar company can export our spirit of building a new industry,” says Asbeck. “Opel can be the first green car company in Germany.”