General Motors continues to defy the laws of natural selection. It is supposed to be the case that an organism that cannot hold out against its rivals and predators, eventually succumbs. GM has not succumbed, and shows no sign of doing so.
Go deeper with GlobalData
GM is not alone in dodging extinction. Chrysler has done the same by morphing into a variant of Fiat which has itself met and negotiated successfully with the Grim Reaper. A quick look along the ranks of the world’s car makers shows that despite the smallest annual number of cars sold in the mature car markets coinciding with the biggest economic recession, none of them is prepared to perish.
Is this a good or a bad thing? One opponent of unnatural industrial organisms is Kurt Lauk, chairman of the Economic Council of the Christian Democratic Union. He says that Germany should not dream of putting money into Opel. If GM cannot support Opel, it should become insolvent and then GM can restructure the company. The financial burden for that should remain with GM and “not with German and European taxpayers.”
The resuscitation of a failed car company with taxpayers’ money is as unnatural as fining taxpayers for not buying cars made by unsuccessful companies. That is basically what is happening. Because General Motors Europe made Opels and Vauxhalls that were either too expensive or too unattractive, the enterprise was unprofitable and is unsustainable. Taxpayers bought VW cars instead. How fair is it to say to the VW buyer that he now has to pay more tax because the German government wants a short-term fix for Opel rather than allowing the spoils to go to the victor. If there is no Opel, VW will build another factory. Everything stays the same. Only the name over the door changes.
And how fair is it to say to VW that it must pay more corporation tax to sustain GME?
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataOn Tuesday the new chief genie in the genetic modification of GM Europe appeared in London to explain how GME intends to survive and prosper. Nick Reilly, a Brit and GM’s safest pair of hands has operating experience of the emerging markets of the world and China and Korea in particular. He has also run both Vauxhall and Opel in the past and has a rough idea how it should all work. He describes the financial losses of GM US and GME as “severe”.
He is mandated to count the money as it is promised by governments of countries with a resident GM workforce, and see whether it is going to be enough to sustain life.
It is his job to ensure that the owner of the VW Golf and the maker of Volkswagens divi up the tax grants in sufficient quantity to prolong the life of his enterprise. What he does not want is the application of the law of natural selection which decrees that in business, as in life, those that fall get left behind. To avoid it, the living thing that is GM needs genetic modification.
Rob Golding
Note: The definition of GM is…an organism that has received genetic material from another, resulting in a permanent change in one or more of its characteristics
See also: Government aid key to GM European restructuring
