US Taxpayer GM Bailout Money Paying Salary Of German Opel Workers
We all remember that old song "What a Difference a Day Makes, 24 Little Hours", well it seems that just a little while ago General Motors was drastically trying to bail out of its European operations, almost at any cost. The Saab automotive manufacturing facilities in Sweden was being sold off to Supercar Maker Koenigsegg, while the money losing Opel and Vauxhall European car manufacturing infrastructure was going to be sold to a consortium headed by Canadian autoparts maker Magna in conjunction with a Russian bank. Heck, they didn't even go through with the sale of Saturn to Penske, preferring to just let that brand die.
Put yourself into the position of General Motors. You need to pay your rent and feed your kids and the cupboard is bare. The credit cards are maxed out and there are only pennies left in the savings account. So you decide that you have to sell some of your stuff to put food on the table. So you put a for sale sign on the family car, an ad in the paper to sell your 46" LCD TV and Xbox 360, and start papering the town with notices for your Huge Garage Sale this weekend.
But then, all of a sudden, a long lost relative shows up and because you're cute, he decides to lend you a few hundreds of thousands of dollars. No real reason, and no real repayment schedule. Here's a big whopping check, have fun with it.
So do you still sell the car and the TV and have the Garage Sale? Hell no. You run around town ripping down all the Garage Sale signs you put up, tell anyone who calls about the car and the TV that it's not for sale any more, and you book a trip to a five star resort in Tahiti.
That is essentially what General Motors is doing now. It seems that since the bailout money which was sucked out of taxpayers' pockets and landed into General Motors back account has finally registered in the higher echelons of Detroit's General Motors Building, it seems that the General Motors no longer needs to sell these European factories.
The conditions that the General Motors suddenly started to place on the Saab sale made Koenigsegg run away screaming. The guarantees required were going to be far greater than Koenigsegg could possibly ever justify, and General Motors knew it.
While Magna and the Russian bank were literally on the verge of taking possession of Opel and Vauxhall brands in Europe, it turned out that it was General Motors that backed away.
The announcement by General Motors that they plan to maintain all of the German auto plants operating, including the ones they already stated were going to be closed no matter what, is interesting if for no other reason than to realize what is going to be source of funds that is going to keep these auto plants running.
Is there truly any doubt no matter how convoluted the bookkeeping procedures of any multinational corporation may be that the Opel and Vauxhall plants will stay open in Europe being at least partially funded by the American taxpayer?
Why would General Motors not want to take money for an asset that they were going to throw away anyway? It's like someone coming up to you as you're taking out the trash and offering you $500 for your garbage bag. So you tell him to get lost? No I don't want your money, I want this big pile of empty rusty cans and rotten chicken fat to go into the dump!