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The World From Berlin

Should Opel Get Life Support or Euthanasia?

A day after executives at ailing German automaker Opel met with Chancellor Angela Merkel to discuss a multibillion-euro bailout, commentators in the German media are skeptical. Most think it would be better to let the carmaker collapse than to save it.

As German politicians rush to outdo one another in their efforts to find a solution to the crisis facing automobile manufacturer Opel, editorial writers in German newspapers are finding a number of reasons to oppose government assistance for the Rüsselsheim-based General Motors subsidiary.

On Monday, German Chancellor Angela Merkel held a meeting with Opel executives in which she pledged to look into the possibility of using government money to offer the firm a €1 billion ($1.26 billion) in loan guarantees in the event of a collapse of its Detroit-based parent company. While Merkel was meeting with Opel executives, her political rival Frank-Walter Steinmeier, a Social Democrat who serves as foreign minister in the grand coalition government and is running as his party's candidate for chancellor, met with employee representatives of major German carmakers and union leaders.

But while Merkel was careful to refer to a potential Opel bailout as a "special case," precluding the possibility of any government relief for the industry as a whole, Steinmeier stressed the need to take care of workers across German industry. Today, in an interview given to the mass-circulation daily Bild, Steinmeier made a joint statement with Luxembourg Prime Minister Jean-Claude Juncker calling for a comprehensive, European Union-wide plan to protect jobs.

"After the bailout of the banks we now need a protective shield for the workforce," Steinmeier told the paper.

But as Germany's political class springs to action, the editorialists at many of the country's newspapers are calling for restraint. The unfortunate result for Opel is criticism from both sides of the political spectrum. While economically liberal voices on the right might be expected to preach against special treatment for Opel as unwarranted government interference in the economy, even the normally pro-interventionist left is wondering why it should save Opel, which it sees as an incorrigible polluter.

Only once we go as far left as the Berliner Zeitung do we find a voice in favor of a bailout. But they go even farther, calling for a nationalization of Opel and the dismantling of the capitalist system. A bit more, perhaps, than Opel's executives had bargained for.

The center-right Frankfurter Allgemeine Zeitung writes:

"One decisive question remains unanswered: Is there actually a chance the patient will recover? Doubts are warranted. No one knows how quickly the loan will be needed. Federal and state politicians cannot realistically assess that chances that parent company General Motors, which has owned Opel for 80 years, will go bankrupt."

"The auto managers in Detroit have brought this venerable German brand to the brink of ruin through decades of unparalleled mismanagement. They alone are responsible for saving their own business, along with all its subsidiaries, from collapse. Opel is so closely connected with General Motors that it would be almost impossible to disentangle it from the network. They share common platforms; Opel develops for America and gets technology and models from a subsidiary in South Korea. Earlier mistakes on the part of General Motors should not be retrospectively legitimized with taxpayer money from Germany. That would also be a bitter outcome for Opel's 26,000 employees."

The right-wing Die Welt writes:

"The question of whether (a bailout) will really save Opel in the long-term is taking a backseat. The German automaker's operations are so integrated into General Motors's worldwide business that it is hardly possible to conceive an independent future for it without a recovery of its American parent. There would have to be huge chunks of taxpayer money dedicated on both sides of the Atlantic to secure Opel's survival in the conglomerate. And even then, steep job cuts are unavoidable, given the overcapacity in the plants and the shortcomings in the product pipeline."

"This is how grim things are: Going into bankruptcy in the event of a collapse would not only be the cheapest option, it would also offer the chance -- through finding a new investor or through a merger with another European automaker -- of creating durable, competitive jobs at Opel's work centers. The idea that the government can stop a market correction is an illusion."

The left-wing Berliner Zeitung writes:

"It's extremely lucky for capitalism and for its devotees that the failure of state-organized socialism was so categorically documented during its collapse 20 years ago. Now, as capitalism is failing, it occurs to virtually no one to try again with another system. Opel, therefore, will not be nationalized."

"It would probably serve Opel well if it separated from its parent company, General Motors. For Opel's crisis finds its origins not in the recent tumult of financial markets, but rather in a corporate strategy that has been categorically failing for years. According to the principles of the market economy, General Motors must go bankrupt on account of its management failures. Yet the consequences would be so disastrous for the American economy that even there the state is intervening in a way contrary to the system. In any event it is crucial that state help for Opel in Germany does not become a subsidy for General Motors."

"Still, the crisis couldn't be that great if the government's coalition partners are finding time and reason to pursue their little rivalries. (Chancellor) Angela Merkel quickly made the Opel-crisis into a top priority once she got the impression that her Social Democratic colleagues (Finance Minister) Steinbrück and (Foreign Minister) Steinmeier would dominate the debate about solutions. It's less than a year until national elections, and, looking from today, the elections will also revolve around the question of which coalition partner is the more able crisis manager. Given the profound problems with the market economy, one could well imagine that in order to keep their promise of enduring prosperity, they might put the whole question of the economic system to a vote. But not even the Left Party has the heart to do that."

The center-left Süddeutsche Zeitung writes:

"Who will be the next in line after Opel to ask for state support? Ford, Daimler-Benz, BMW, auto suppliers? No part of the industry is safe from the threat; all sectors are at risk. The only thing that is certain is that the state's ability to save companies from collapse is limited -- and the sums now being spent to try to do so will in the end fall to the citizenry in the form of higher taxes, growing debt-burden and rising inflation. One could call this a return to normalcy. It at least constitutes a permanent crisis."

"Hundreds of large corporations have gone under in the past, often with negative consequences for workers, and yet so far there have always been others to take their place. Why should a few companies -- and why these, and why now -- have their existence guaranteed? Why should the state prolong their lives? And how alluring is a bailout whose effect can only be to prolong agony, when we know that the auto industry is like a new form of coal-mining?"

"The economy doesn't even need oil, but could rather, without further ado, transfer the money it makes from oil into alternative energy, if the profits were agreeable. In capitalism's perfect indifference with regard to the raw materials with which it works, there lies a considerable amount of hope."

-- Christopher Glazek, 1:15 p.m. CET