General Motors on Tuesday must present its restructuring plan to the US Congress in order to justify a $13.4 billion loan package from the government. But if American lawmakers aren’t convinced, it will have potentially dire consequences for its German division Opel. In recent days, voices in Germany have been growing for the storied German carmaker to break away from GM.
Might German states where Opel has factories even take a stake in the company in order to secure jobs and shield it from American cost-cutting plans? Many newspapers in The Local’s media roundup seem to be advocating tough love for the German automotive icon, seeking to avoid a precedent of providing government aid to large companies in trouble.
The Financial Times Deutschland states clearly in a brusque editorial that Germany should not intervene to rescue Opel: “Close your eyes, take a deep breath, and try to imagine a world without Opel. If you should decide that nothing would change, then you feel the same as almost all Germans – excluding those directly and indirectly employed by the plants, and some Opel drivers.”
The paper argues that companies bear their own risk of insolvency, and that the state has only intervened on behalf of the banks in the current crisis because financial institutions have a significance for the overall stability of the national economy – which is not the case for Opel. “Germany’s politicians seem to have already got so used to playing the rescuers that they step in all over the place where things are tight, like a reflex. This development cannot go any further.”
Business daily Handelsblatt also sees the consequences of government intervention as having a potentially disastrous global impact. “State handouts for industrial companies are a poison, whose catastrophic effects will soon be felt not only in Germany but also throughout the networks of our ever shrinking planet,” writes the paper. ”Who is going to be able to plausibly combat the wave of protectionism sweeping through the world of the G20, when he buckles at home at the first sign of a collapse?” Insolvency is not only necessary to allow a market economy to function, argues the paper, it also allows those parts of a company which are still economically viable to survive.
Berlin-based Tagesspiegel on the other hand chooses to outline the reasons why the state premier of North Rhine-Westphalia, Jürgen Rüttgers, will possibly fail in his attempt to secure agreement from GM executives for hiving off Opel: “Firstly, because GM doesn’t want to bother itself with German state politicians; secondly, because the European Commission would go on the warpath after its experience with the Volkswagen law; and thirdly, because German tax money would directly help the ailing GM company.“
The conservative Frankfurter Allgemeine Zeitung is also keen to point out that the difficulties faced by Opel cannot be entirely blamed on GM and that its sales in Germany have plunged by 25 percent. “A state share in the company will do nothing to change that,” opines the FAZ. Instead, supply must be adapted to fit demand, and, even in the case of insolvency, “most of GM and Opel would survive.”
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