Europe Decides: All Or Nothing For GM. Looks Like Nothing
Friday the 13th was a bad day for GM Europe, and by extension Opel, Vauxhall, and Saab. Ministers of eleven European countries where GM has a presence met in Brussels to decide what to do about the ailing American automaker’s foreign empire. First, they listened to reports by Frederick “Fritz” Henderson, COO of GM, and Carl-Peter Forster, CEO of GM Europe. Then, they decided to do nothing. Even more disconcerting for GM, the ministers decided that no country should do anything to bailout GM unilaterally. “There will be no rescue measures on a national level without prior European coordination,” reports Automobilwoche [sub]. And as if this wasn’t bad enough . . .
Even more ominously, Industry Commissar, Günter Verheugen, and Competition Commissar, Neelie Kroes, insisted that any possible help for any GM-subsidiaries go strictly by the (European) book; the competitive landscape in Europe may not be impaired by help for individual companies.
Sweden’s state secretary in the ministry of enterprises, Joran Hagglund, told reporters after the meeting that officials agreed that sticking to EU rules was paramount, Reuters reports.
“We have to uphold state regulations, not shove taxpayers’ money into companies that are not viable on their own,” Hagglund said.
GM has production in Belgium, Britain, Germany, Poland, Spain and Sweden, with other countries home to suppliers.
GM is currently trying to raise €3.3B in aid. If nothing can be done “without prior European coordination,” there is strong doubt that anything ever will be done. Even amongst the willing, European coordination is a long, drawn-out process. It looks more and more like there is no will to save Opel, and, if anybody asks, Brussels can be blamed. The European countries effectively tied their own hands. As for the chances of ever reaching consensus, listen to what Belgian Economy Minister Vincent van Quickenborne had to say:
“Belgium doesn’t agree with countries taking measures that are only in favor of themselves or different parts of the company in other European countries.” Mind you, this comes from a county where GM has a plant in Antwerp.
In the meantime, Saab and Opel dealers are watching their bank accounts closely. On March 15, the annual incentive and bonus payments for 2008 are due from Saab. Since it’s a Sunday, a lot of Saab dealers will call their banks on Monday afternoon and inquire about incoming funds. Opel dealers are expecting incentive payments on March 20, many of them are due millions. “Suspense is high,” says the German dealer rag Autohaus.
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- Adamscotthi Thanks a lot for article!
- MaintenanceCosts This class of car competes hard with Chargers/Challengers and modded diesel pickups for the douchey-driving crown.
- 28-Cars-Later Corey - I think I am going to issue a fatwa demanding a cool kids car meetup in July somewhere in the Ohio region.
- Master Baiter Might as well light 50 $100 bills on fire.
- Mike1041 At $300K per copy they may secure as much as 2 or 3 deposits of $1,000
Ingvar - I think you're 100% right regarding the lack of a viable plan. The other evidence confirming that is the speculation about interest in Volvo from the usual suspects and the complete lack of interest by anyone in an equity stake in GME.
I agree w/ those above who've said that this is being done 'cause there's no member state to back GM. And as GM fails and disappears you'd have some scraps left over for Euopean companies like VW and group, PSA, Renault, Fiat and even Ford (not to mention assorted Asians) that would gain market share and sales. Yes you can look at the Chrysler story and put out grandiose words supporting "free" markets and capitalism, but remeber, the Europeans are masters at hiding behind words, or giving them just enough of a twist that they can mean anything, which is to say, nothing. Unfortunately, this is a behavior Americans normally cannot understand.