Economic coverage in Europe continues to be dominated by the plight of the euro and of the Greek government. In a way, that’s too bad, because there are plenty of other simmering problems which lose the spotlight when crises pop up elsewhere – even though that hardly means that their own situation has been resolved. One such remaining problem is the question of what to do about Opel, the European-based subsidiary of General Motors which got into trouble last year more-or-less because its parent company actually had to declare bankruptcy (on 1 June 2009) and be restructured, with a majority ownership share going to the US Government.

Reviewing my own Opel coverage on this blog, I have to confess to also being guilty of that “follow-the-spotlight” syndrome, in that my last Opel post, on September 14 of last year, came prior to the latest and most intriguing development in that saga. That happened in November, when GM decided to go back on an agreement that had been reached two months before with the German government to sell off Opel to a consortium led by the Canadian auto parts-manufacturer Magna. Yes, that deal was suddenly canceled, so it was back to the status quo ante: Opel remained a GM subsidiary and the German government could resume worrying about how much in subsidies to let GM extort against the threat of shutting down some or all the Opel plants in Germany and thereby throwing thousands out of work. (Then again, at least it had seemed back in September, before GM reneged on the deal, that the German government had found a solution to keep Opel going, and it was that timing that was the most important consideration – there was a nationwide election held in late September 2009, after all!) (more…)

What’s going on with the Swedish automobile manufacturer Saab (owned by General Motors since 1989)? Is it to die, or not? Not even the correspondent for the esteemed German business newspaper Handelsblatt, Harold Steuer, can quite figure out what is going on, but he does give that his best try (The tangled game around Saab continues).

If you haven’t been keeping track, Saab is supposedly in line to die because GM is ready to pull the plug and shut it down: the mother company announced last Friday that it was ready to begin Saab’s “orderly wind-down” and named some liquidaton-partners it expects to hire to help with that. But not so fast: cars are still being produced at the plant in Trollhättan! They are new models, even! What is more, a take-over offer from the Dutch sports car-maker Spyker (actually, that company’s third such offer) was put forward last Friday. There is a similar offer outstanding from a consortium of the investment company Genii Capital (based in Luxembourg) and Formula 1 head Bernie Ecclestone, and also one from yet another consortium that includes former Swedish politician Jan Nygren and the former head of the German truck-maker MAN, Håkan Samuelsson. And GM has made it clear that it is still open to considering all such offers.

The union representing Saab workers are furious at the resulting uncertainty about the company’s future, calling the company’s behavior “inconsistent and shocking.” And then there’s a further rumor Steuer reports of Saab moving a factory to China to produce there the new 9-5 model and/or Buicks directly on behalf of General Motors.

What to believe, if anything? Steuer makes the sensible observation that the best thing to believe is the fact-on-the-ground, namely that a new model (namely that “9-5” – maybe there even are plans to hire Dolly Parton as advertising spokeswoman?) is now starting production. So GM probably does not in fact plan to allow the company to shut down entirely just yet.

One element in a new spending bill now agreed to by both the US House and Senate is a provision which would provide a US Government voucher of up to $4,500 to Americans to trade in their old automobile for a new one – preferably one more fuel-efficient. It does seem that, as things have proceeded through the legislative process, the motivation of stoking domestic demand for new automobiles has plainly won out over the initial environmental reasoning behind the measure, but at least it does seem pretty guaranteed that the former aim will be accomplished. That much we know from the experience in the country that implemented this idea in the first place, and Birgit Marschall and Martin Kaelble of the Financial Times Deutschland point out that this Abwrackprämie, or “scrapping premium,” is namely a German fiscal innovation. (more…)

The CEOs of Detroit’s “Big Three” automakers (GM, Ford, and Chrysler) made their pilgrimage to Capitol Hill on Tuesday, to make a plea for their own bailout from the federal government. You’d have to say that their show was a flop; media coverage afterwards included accusations of “tone deafness”, together with particular scorn for the fact that the execs had each traveled to Washington to beg for public money on their company private jets.

The foreign press was watching this performance, too, and from the pages of France’s leading newspaper Le Monde, Dominique Dhombres did not even need any mention of the private jets to quite effectively skewer the auto-bosses with an article entitled Ask for pardon? Out of the question! (more…)