I don't think that a solution where the US government puts in money that is used to prop up foreign divisions (the European divisions were profitable, but now everything is operating at a loss) is going to be politically viable.
And GM has the nuclear option to play. Give us money or we close our factories and take the machines back to the US. With global auto demand down substantially, there's a real argument to make the cuts overseas.
Not to mention, that machinery located at Opel and Vauxhall plants could be shipped to the US and save an enormous amount of retooling costs that the company will have to deal with if existing machines are retooled instead of bringing machines that have already been put through their paces back to the home market, to secure the future of the company in the US. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
It certainly seems that GM is playing a game of pattern negotiation here.
Great observation. The strategic advantages of transnational incorporation over geographic incorporation of stakeholders know no boundaries. The securities owners of the holding company --consolidated revenues-- are everywhere. Driving the perceived value of a company's "nationalization" and industry consolidation.
there's a real argument to make the cuts overseas.
Looks like rationalizing [read: reducing number of] GM assets --P&E by brand rather than regional revenue shares-- in order to satisfy equity- and bondholders' demand for profitability [read: uninterrupted interest payments] amounts to holding hostage employment guarantees by brand.This makes politically motivated counter offers to assure so-called social benefits of "nationalizating" a global enterprise difficult to quantify. Meanwhile, FRB handed GMAC a bank charter -- all the more reason to unwind GM manufacturing.
viz. SAIC, Saab, Opel, Saturn and HUMMER (no love lost there).
machinery located at Opel and Vauxhall plants could be shipped to the US and save an enormous amount of retooling costs ...to secure the future of the company in the US.
Not likely. GM will abandon that P&E. Although I haven't read the plans entirely, both GM and Chrysler explicitly tie existing covenants and new financing to launch of 'advanced technology', i.e. hybrid and plug-in EVs, multiple new make and models by 2012, and Li-Ni batteries. Ha.
US Treasury source: GM (117pp), Chrysler (177pp) Diversity is the key to economic and political evolution.
