It’s an ill wind that blows no good.
Yesterday’s announcement out of the blue that GM was to dip very deep into its pockets to fund its Opel restructuring in Europe, came as a great surprise to many, but no doubt as a relief to a few.
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GM had even begun – apparently earnest – discussions with four German Länder in a bid to secure its much-prized loan guarantees but abruptly terminated that process with its shock news yesterday.
“We were astonished,” a spokesman for North-Rhine Westphalia’s economics ministry told just-auto. “But we hope this will be good for the future of Opel.”
They weren’t’ the only ones to be astonished. Behind the diplomatic niceties from the rather ponderously-named UK Department for Business, Innovation & Skills (BIS), lurks an underlying perplexed tone.
“We are pleased that, after a very difficult period, GM is now in a position to fund the restructuring of GME, including Vauxhall, from its internal resources. We look forward to working with them going forward,” is the official line from Her Majesty’s Government.
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By GlobalDataWell, that same government has just saved itself EUR330m of loan guarantees, for which a modest glass of something cold might be being raised in the corridors of Whitehall today.
The new British Conservative-Liberal coalition had inherited the EUR330m commitment from previous business secretary Lord Mandelson, who in the manner perhaps of someone knowing their electoral shelf life was rapidly drawing to a close, appeared to be waving the chequebook about quite freely before 6 May.
The new administration had pledged to undertake a root-and-branch analysis of all significant spending commitments by its predecessor as it struggled with a mountain of debt, but GM has now spared it the trouble.
And so the incoming government is able to bask in a bit of glory it hasn’t really merited. Opel CEO Nick Reilly went out of his way yesterday to praise the UK for its famous EUR330m and now the new fledgling power can soak up the praise.
The proof will be in the pudding. Vauxhall is a significant employer at several sites in the UK and underwriting that loan was clearly a part of its future plans.
Employees – and the government – will be looking to see how far Detroit sticks to its guns.
