Blog: Dave LeggettStill fragmented Europe

Dave Leggett | 10 November 2009

Following GM's decision last week to hang on to Opel/Vauxhall rather than sell to a consortium led by Magna, the fallout continues. But the fallout is not exactly unexpected. After the initial and predictably strong political reaction, especially in Germany, there's the realisation that people have to deal with a new set of circumstances to get the outcomes they want - or the 'least bad' ones.

Restructuring was coming down the tracks anyway, whoever eventually owned Opel/Vauxhall. Is GM's plan going to be much different from what Magna was preparing? The differences are maybe less than many people were thinking. Magna was playing the politicians to some degree, to win support for its bid in Germany. It played that game very well.

And now, GM will be looking very carefully at how it approaches relations with national governments in Europe, especially Germany, where half of Opel/Vauxhall 50,000 strong workforce is based. Be careful not to take all of what you see in the press at face value.
If you were at GM and planning to visit Berlin soon to lay out a new business plan, you might want to stoke the cost-cutting fires up a bit before rocking up with a few olive branches for Mrs Merkel. Shut Bochum? No, where did you hear that? We just want to resize the plant for new market conditions and modernise it...

That things are so highly politically charged for GM is a consequence of having a multi-national footprint in Europe. The European Union, you see, is still - in reality - a rather fragmented place. There's a duality to the 'European project' that the Opel/Vauxhall saga has amply demonstrated. Sure, there's never been a shortage of grand designs and ideas aimed at consolidating European political unity - the Lisbon Treaty is the latest example - but when push comes to shove, competing national interests come to the fore.

What's best for Opel/Vauxhall from a business perspective has been rather lost in the political horse-trading on which plants and jobs might go under restructuring. Look across the EU and you'll see very big differences in the way countries are run, lifestyles, cultures, the way that economies function, levels of taxes and so on. Is that a good thing? In some ways yes, in some ways perhaps not.

But when fundamental national interests or jobs are at stake it's pretty clear that, in Europe, the business case for a particular course of action may be subject to a good deal of political interference coming from nation states.

GM does eleventh hour U-turn on Opel/Vauxhall sale


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