General Motors, once the world's largest automaker and a rock-solid icon of America's industrial might for much of its 100-year history, filed for insolvency on Monday and will receive an additional $30 billion in taxpayer funds in a restructuring that will turn it into a slimmed-down, mostly government-owned company.
President Barack Obama has said he is confident GM can emerge quickly from bankruptcy and has pledged a "hands-off" approach, saying the government has been thrust into a reluctant position as controlling shareholder.
The carmaker is expected to shed more than 35,000 jobs, leaving fewer than 200,000 in its revamp. Obama wants GM to emerge from court protection in as little as 60 to 90 days.
German media commentators say GM's insolvency marks further proof of American's waning economic influence in the world, and they express concern that Obama's administration, despite its assurances that it won't interfere in GM's business, will distort competition by running the firm according to political rather than market principles.
Business daily Handelsblatt writes:
"America's economy is losing power and influence in the world. It's a creeping process and only becomes visible on days like yesterday: General Motors, a warhorse among the world's industrial companies, significantly bigger than the failed and scandal-ridden Enron and WorldCom, has filed for bankruptcy protection. A fat chapter has been added to the book on America's de-industrialization."
"This process, which began with the relocation of textile production to Asia and then pushed steel producers, tire plants and many other industries out of the country, has plunged the country's political leaders into increasing despair. How else can one interpret the gigantic rescue operation for GM that will end in the nationalization of the biggest auto company in a country that has always hailed itself as the paragon of capitalism?"
"One has to say in defense of the Obama government that it was caught between a rock and a hard place. Unlike in Opel's case, a collapse of its parent company, which is seven times larger, would have triggered an economic and social earthquake. Obama decided to prevent it. He is holding on to an industry in which America hasn't been able to spearhead innovations for years. One is inclined to wish him good luck in this risky endeavour."
Business daily Financial Times Deutschland writes:
"The restructuring of the group will turn into a political drama. That creates considerable risks for the entire US economy, but also for international competitors operating in the American auto market. The restructuring of GM will be extremely expensive for the American taxpayer, $50 billion could disappear into a black hole. But in the long run, the fact that it will be impossible to run this company in line with market principles will weigh far more heavily than the financial burden. It's already clear that job cuts and plant closures will soon be discussed in a similar way as the closure of military bases: regional politics will be at least as important as productivity figures."
"It's to be feared that the government's new-found role as one of the biggest auto producers will make it lose interest in free and open competition. Suggestions that US manufacturers should build small, fuel-efficient cars in America rather than importing them don't bode well. It's absurd if the government gets involved in product development. There's long been a consensus in Washington that America needs more fuel-efficient cars. But no one has dared to take the simplest and most market-consistent step of raising fuel taxes."
Center-left Süddeutsche Zeitung writes:
"If Obama fails in his attempt to save America's automobile industry, his economic policy will lie in ruins. But politicians make poor business managers and the economic crisis hasn't altered this fundamental truth. This isn't because elected politicians aren't as competent as private sector managers, but because they have other interests. This has to be so -- politicians are committed to the common good and have to organize electoral majorities to achieve their goals. In the nationalized General Motors, serious conflicts of interest are unavoidable."
"Obama is right to want to force the auto industry to become more fuel-efficient. But the few models with which General Motors has been earning money happen to be gas-guzzling pick-up trucks and sports-utility vehicles. How does the state as shareholder tackle this? Or jobs: politicians have already prevented GM from shifting jobs to China. That's good for the workers, but bad for GM. Business success and political goals are often in conflict with each other."
Conservative Frankfurter Allgemeine Zeitung writes:
"The insolvency of General Motors is a historic moment for America. June 1 also marks the day on which Barack Obama rewrote the rules of American capitalism. It's an alarming development. The government's insistence that it's a reluctant shareholder which will play a largely passive role in General Motors doesn't seem very credible. That's already clear from the list of principles it has compiled for its handling of future stakes in private companies. The government says it will give companies leeway but at the same time cited a number of cases in which it would intervene in corporate management."
"In fact Barack Obama has shown in the case of General Motors and Chrysler that he's prepared to play a very active role. He dictated very unattractive debt reduction terms for creditors and then labelled them as speculators. Who is going to lend a government-owned company money in the future if they're treated like that? Also, General Motors recently bowed to pressure from the government and withdrew plans to import small vehicles from China after the trade union protested against it."
"General Motors mustn't become a pawn of American political forces. Barack Obama's actions so far don't inspire much hope."