GM's Foreign Relations Suck

Over the daily Toyota runaway stories, it’s easy to forget the plight of GM and its children abroad. If you think that’s the idea, then you are a miserable conspiracy theorist, and you should stand in the corner. With that in mind, let’s check in with GM and its worldwide siblings to see how they are doing.

From the U.K. comes the cheerful news that “Lord Mandelson put £270 million on the table yesterday to finalise a deal with General Motors that will keep Vauxhall operations going in Britain and save 3,200 jobs. The American car group said last month that it would cut more than 500 British jobs but would keep production going at Ellesmere Port and in Luton if there was state support,” writes the Times of London, a bit confused about how many jobs will be saved.

“Vauxhall” is British for Opel. For us ignorami, £270m is a bit over $400m. A pittance of a charitable contribution, in the grand scheme of the $2.5b which GM is intending to collect from Germany, Spain, Poland and Austria.

The U.K. is the first European country to open their purse for Opel. Not such a brilliant idea, as we shall soon see. No word yet on donations from Germany, Spain, Poland and Austria.

From Spain, Reuters brings the news that Spanish unions and GM have reached a preliminary agreement to keep the Figuruelas plant open.

From Germany comes the message that their government is mightily miffed with the duplicitous Brits.

“The German government and the European Commission most likely are not amused by the advances from London,” writes the Frankfurter Allgemeine Zeitung. The EU countries had agreed in Brussels not to take unilateral action. And the way the $400m bailout from London is written and announced, the UK will most likely keep its money.

Trading support for jobs is utterly forbidden in the EU. The donation smells like a pre-election ploy that makes Labour look good. The wording of the announcement just begs for the deal being shot down in Brussels. If it ever makes it past Berlin.

Most of the $2.5b is supposed to come from Germany, and here “negotiations remain particularly sluggish, with Berlin’s economics ministry saying on Friday GM has yet to update its application for government funding ever since Detroit tripled its commitment to fund Opel’s operations,” reports Reuters. If Germany doesn’t reach into its pockets, the other countries can keep their spare change.

GM, with its usual finely tuned sensitivity to political nuances, just made jet another step to alienate its prospective creditor: Russia, and the former countries in the Russian region used to be under the purview of Opel. That is about to change. The former General Motors Europe has ceased to exist, Opel is GM’s Europe. Most of Russia, and definitely Moscow is in Europe. GM thinks its in Asia. “GM transferred responsibility for Russia to GM International Operations (GM IO), based in Shanghai, sparking fears that Opel could lose access to a key growth market which almost overtook Germany by size in 2008, before collapsing last year,” reports Reuters.

The unions immediately protested. No word from Berlin yet. They’ll probably keep their choice words for Monday. Or they’ll say nothing and keep asking for an updated application, which they will ultimately reject.

With Opel going nowhere, with Daewoo in tatters, with SAIC flexing its muscles and assuming control in China, and soon India, (and now Russia..), GM’s fortunes abroad are declining. The world is watching how Toyota is being treated like a common criminal. The world is thinking: “We could be next.” This is not an atmosphere that is conducive to much help for a company owned by the American government.

Speaking of China and Korea: Shanghai GM is recalling 2,065 Chevrolet Captivas imported from South Korea. The Daewoo-made Capitvas risk steering malfunctions, says China’s General Administration of Quality Supervision, Inspection and Quarantine, according to Reuters.