Blog: We'll remember Geneva '09, but not for the cars
Dave Leggett | 8 March 2009
That was one tough week we just went through. The uncertainties and question marks surrounding GM seemed to get bigger. And in case anyone is in any doubts about the seriousness of the situation, it was revealed that even the General’s own auditors are not sure that GM can stay solvent.
The financial crisis for GM in the US is obviously bad enough, but the uncertainties over European operations have grown, too. GM Europe could be just weeks away from running out of cash and is appealing for state assistance as part of a plan to become profitable by 2011.
Governments everywhere are being cautious as the difficult questions ring out. Has the business model become invalidated at much lower industry volume? Is the business plan credible? Can/should the vulnerable company raise finance elsewhere? Are there better ways to use state money to support a recession battered economy? The questions don’t come with easy answers. And if we don’t get the aid we need quickly, there will be harmful consequences, appears to be Carl-Peter Forster’s message (or threat) to European governments.
Carlos Ghosn’s latest view on Europe came out at a post-Geneva press conference at which he was wearing his ACEA hat. He made a particular plea that the European Commission postpones any new and costly to comply with regulations:
If anyone was looking for hopeful signs in the gloom, last week did at least see some strong sales figures reported for the German car market in February. A scrappage incentive there played a part, with manufacturer incentives on top. Carmakers clearly want to shift the metal backing up in fields and car buyers scent deals that are about as good as they will get. As companies, their stakeholders and indeed governments grapple with ‘viability plans’ it’s a reminder that there is still plenty of automotive business to be done, even in a recession, and that governments can play a vital role in stimulating demand if they apply the right levers.
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