View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Uncategorized
May 22, 2009updated 12 Apr 2017 11:59am

Editor’s Letter: Turning around the GM supertanker

Those observing the unfolding events at General Motors in the US have come up with a variety of clichs and metaphors to describe the manufacturers long decline like watching a car crash in slow motion, like a giant brought to its knees, like watching someone bleed to death via a thousand cuts.

By Jo Tacon

Those observing the unfolding events at General Motors in the US have come up with a variety of clichés and metaphors to describe the manufacturer’s long decline – like watching a car crash in slow motion, like a giant brought to its knees, like watching someone bleed to death via a thousand cuts.

My personal favourite is the supertanker and the iceberg, with GM’s executives finally able to see the menace looming ahead of them, but unable to change course in time to avert disaster.

It remains to be seen whether the actions it is taking in the US – such as cutting 40 percent of its dealers and getting rid of the Saturn, Hummer, Saab and Pontiac brands – are enough to save it.

Meanwhile, in Europe, the German government is in the unenviable position of having to choose one of three bids tendered for Opel, with the consequences of choosing an unsuitable suitor potentially catastrophic.

Will Angela Merkel’s administration opt for parts supplier Magna International, acquisition-hungry Fiat, or dark horse RHJ International, about which little is known?

At least Germany will be in a position to minimise job losses for German employees of Opel – although the European Union may well have something to say on that matter.

The future for GM’s factories outside Germany, including Ellesmere Port, just got a little darker. Writing as someone who grew up very close to the ’Port, this is sad news indeed.

Events at GM’s former captive GMAC are no less dramatic. President Obama has promised “more capital” for GMAC – with $7.5 billion the latest rumoured figure – and said that the financier will also take on the job of providing funding for Chrysler’s customers and dealers.

Whence, then, Chrysler Financial? It seems a shame to let all those systems, employees and distribution channels atrophy away to nothing. In fact, Bloomberg reported, Chrysler Financial’s owner, Cerberus Capital Management – which, until recently, clung to its dream of combining the captive’s operations with those of its other auto finance investment, GMAC – may convert the unit into a standalone lender, or begin to offer “insurance or remarketing leased vehicles”, Bloomberg said.

Back in the UK, the government’s long-awaited scrappage scheme was finally unveiled (see Finn: New scrappage scheme could mean end of 0% deals and Varying response on financial terms), and is, as might have been expected, a bit of a mealy-mouthed mess, with industry dissatisfaction – beneath official proclamations of satisfaction – not hard to detect.

It is still very early days for the scheme, and it may yet surprise us all. But it is hard to square one of the government’s stated aims – of reducing CO2 emissions from transport – with the scheme’s utter lack of a green angle.

Joined-up government? What’s that?

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Motor Finance Online