GM: US Taxpayer-Funded Opel Plans By Christmas

Edward Niedermeyer
by Edward Niedermeyer

Automotive News [sub] reports that GM will rush out its $4.9b restructuring plan for Opel in December, as it seeks to ease worries on the continent about the fate of the troubled division. “Our plan is very similar to Magna’s. I don’t think it’s worse,” GM’s Nick Reilly told reporters near Opel’s largest plant in Zaragoza, Spain. Reily has said that as many as 10,000 jobs and 20 to 25 percent of Opel’s production capacity could be cut in the restructuring. Though Reilly refused to indicate where cuts could take place, he did say that GM would not transfer production from Zaragoza to Eisenach in eastern Germany, as Magna had planned to do. He also previously implied that British government loans could prevent or mitigate a planned 800-job cut at Opel’s Vauxhall operations in Britain.

Meanwhile, back in the U.S.A., questions about GM’s use of bailout funds to save overseas operations are starting to filter into the mainstream media. “We certainly need to be prudent about it, be very careful about it, but we do have the ability to run a global business,” says Fritz Henderson. After all, when asked specifically about the use of taxpayer money in an Opel bailout, Ron Bloom made it clear that the Obama Administration simply doesn’t care. “We are not going to meddle in GM’s decisions,” he said. “We are a shareholder but we are not an active shareholder.” Game on!

Edward Niedermeyer
Edward Niedermeyer

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6 of 12 comments
  • ClutchCarGo ClutchCarGo on Nov 19, 2009

    That's the thing about money, bailout or otherwise. It's completely fungible.

  • GS650G GS650G on Nov 19, 2009

    What a great idea. Take US tax dollars and bail out foreign plants, preserving foreign jobs. I think I'm going to be sick.

    • See 1 previous
    • John Horner John Horner on Nov 20, 2009

      Do you really think that giving away Opel would have led to more jobs being sustained in the US?

  • Vaujot Vaujot on Nov 20, 2009

    If keeping Opel is the right thing to do as a business decision (I have no opinion on that), then it is appropriate that the US taxpayer as GM's largest shareholder foots the bill.

  • John Horner John Horner on Nov 20, 2009

    Shock! Horror! The investor is letting the board make the tactical and strategic decisions!