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'GM Has Done Serious Damage to the Trans-Atlantic Relationship'

The decision by General Motors to hold onto its German subsidiary Opel has unleashed a wave of shock and despair on this side of the Atlantic, with politicians railing against American corporate duplicity and unions striking. But some commentators think that maybe the GM decision is actually good for Germany.

Germans are angry. After months of wrangling over the fate of carmaker Opel, both Berlin and the rest of the company thought they had a deal -- namely that Opel would be sold to a consortium made up of the Russian bank Sherbank and the Canadian autoparts supplier Magna.

This week, though, GM elected not to go through with the deal. And reaction from within Germany has been swift and tinged with outrage. On Thursday workers at Opel plants located in Germany protested against the GM decision. "We will fight for our future together. We will not be beaten. We know who we are, we are Opel!" was the rallying cry of leading unionist Klaus Franz, head of the Opel works council. Employees are concerned that the American owners will make painful restructuring decisions. The number of job cuts so far mentioned, around 10,000 in Europe, is no different than that foreseen by Magna. But with almost half of the Opel workforce located in Germany, many are concerned about a new wave of unemployment.

The governors of states where the plants are located have also been particularly vocal in their criticism of the GM decision. "Now they must explain what they can do alone," Roland Koch, governor of the state of Hesse, said at a rally in Rüsselsheim on Thursday that was attended by around 10,000 people. GM has not yet presented its plans for restructuring Opel.

German Economics Minister Rainer Brüderle has likewise expressed his anger, saying on Wednesday that the GM decision was "completely unacceptable."

But his boss, Chancellor Angela Merkel has said little about the decision except to say that she had discussed the GM decision with US President Barack Obama and that he had assured her that he had no involvement in the decision. Still, the announcement is an embarrassment for Germany's leader. She had pushed hard for the deal to save Opel and her government extended the car maker €1.5 billion in bridging funds while deals were being brokered. Merkel received the news of GM's decision not to sell Opel after all just as she was leaving the US, having made a speech in front of a joint session of the US Congress.

Nonetheless Berlin seems to be prepared to negotiate further with GM. Brüderle said, "they (GM) can come to us with a proposition, just like any other business." German commentators take a closer look at the decision on Thursday.

Conservative newspaper Die Welt writes:

"State funded rescue operations are nothing more than window dressing. Think of these cases: the Holzmann construction group (which went under several years ago) or the mail-order shopping company, Quelle. Horst Seehofer, the head of the Christian Social Union, made €50 million of taxpayer's money available to the latter during the summer. Currently the remnants of those companies are being sold off."

"All this discontented ranting about the changes in the (Opel-Magna) deal just makes the German people more skeptical about state sponsored rescue packages. Which is why this thunderclap from America is actually a healthy kind of shock for our politicians."

The center-right Frankfurter Allgemeine Zeitung writes:

"Operation Magna has fallen to pieces because the new board members in Detroit reconsidered their options. They were encouraged in this by the EU Commission, which has never been totally happy with the German government's role in the sale to Magna. But did the Obama administration play the German chancellor? Angela Merkel met with President Obama that same morning although apparently they spoke about world politics, not the auto business."

"So now there are angry words in Germany. Even the Russian government feels duped -- so much for the trusting relationships they were hoping to establish."

"Yet this is good news for German taxpayers. Even if General Motors still needs to apply for state aid, it will still be €1.5 billion or €2 billion less than previous plans. One should almost be thankful to GM's supervisory board."

"And this decision could also be better for Opel in the long run. Instead of a complicated solution with four different owners, including the employees themselves, now things are clear. GM-chief Henderson is the ruler of his domain once again."

The Financial Times Deutschland writes:

"Anyone who thinks that this is the end of the Opel poker game is mistaken. Basically we are just moving onto the next round. For Germany this is bad news. The German government has already demonstrated how bad they are at the game."

"And they just proved it again. Instead of putting on a poker face, various politicians have been raging against the decision, demanding back the €1.5 million that was lent to Opel by the German government. For GM this is just one more pressure. The parent company could send Opel into insolvency at any time, something the German administration definitely does not want."

"And now, for the next round of the game. GM has already indicated that they may want the German government to contribute some more money. Economically speaking, this makes absolutely no sense: to put more money into an ailing business with no expectations of even a small return."

"The tidiest solution would be to put a big black line through the phrase: 'Opel and politics.' If GM wants to keep Opel, they must do so on their own. Should harsh restructuring be called for in order to keep Opel going and sustainable, then German politicians should accept that. And should the restructuring not work out and Opel have to be declared insolvent anyway, well then so be it."

The financial daily Handelsblatt writes:

"If Germany's former economics minister protested against state aid for Opel, then one might have expected the new one, the economic liberal Rainer Brüderle to do so as well."

"But what does Mr Middle Ground do? Brüderle, who belongs to the liberal Free Democrats, gets on the phone and promises the union leaders help and solidarity. A Social Democrat couldn't have done it any better."

"No matter who is in the government, the state continues playing the role of white knight. It's already obvious that GM will be asking for more money. It will be fun to find out exactly what reasons they give for their next cash request and equally enjoyable to hear Berlin's refusal. None of this seems to have much to do with responsible business practice though -- which is exactly the sort of criteria that might be considered important when one is receiving state aid."

The center-left Süddeutsche Zeitung writes:

"Without the billions of dollars in aid that the Obama administration gave to GM, the company would not exist. And the GM board members who decided not to sell Opel this week were almost all appointed by President Obama. But apparently the American leader knew nothing of this decision by GM when he was hosting Angela Merkel only a few hours earlier. Perhaps at that time the US president really didn't know anything -- which doesn't say much for him. Perhaps he did know something was up but he chose not to tell the German chancellor about it -- that also doesn't say much for him and his administration."

"With their inconsistency, GM managers have done serious damage to the trans-Atlantic relationship. Back in May the GM bosses were keen to sell Opel. In July they suddenly changed their minds. Then in September they wanted to sell again. And now they've changed their minds again."

"A gambler on the stock exchange might be this fickle -- but heads of companies, and especially companies like Opel that have their production plans worked out a year in advance and which sell their goods for seven, 10, even 12 years, are not usually like this."

"In order to keep damage to their image to a minimum GM will most likely try and pay back the money they owe the German government. But they are already expected to ask the German government for more money. And if it looks likely that Opel and its four plants -- even under GM management -- could be rescued, then the German government will come under pressure to help again. The fact that the new coalition government now includes the business-friendly FDP doesn't make any difference. If they are forced to, GM can threaten to close their plants. Which is why the wrangling over state aid to Opel will go on -- as will the danger that the German government will make further mistakes in this case."

Cathrin Schaer