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The German auto company OPEL is reportedly preparing a spin-off from its US parent company General Motors (GM). The company's powerful chairman of the workers' council, Klaus Franz, has said that fresh capital by the German government would provide for a "European solution" to the crisis in GM's global auto empire. Precisely eight decades after the cultic brand became part of GM, such a move enables OPEL "to operate autonomously for the first time and not to become a victim of the disaster of GM", he added.

This sadly reminds me of the cool stance German Finance Minister Peer Steinbrueck took when the first signs of the evolving financial crisis could be witnessed in the US about a year ago. He then plainly said: "this is your problem, not ours; you created the mess, so you better clean it up yourself!" As someone who feels like a true "Atlanticist" and who has been dealing with transatlantic issues for many years, such national-egoist rhetoric upsets me. Have we learned nothing at all from history? On both sides of the Atlantic, the answer to that question seems to be no. The transatlantic rift in solidarity, present for many years in the security realm, has now become visible in the economic sector.

It is legitimate that unions and taxpayers demand that government money remains within national boundaries: as the US government takes care of GM, attaching political conditions to its aid, Germany does so with OPEL. But how can an affiliate of a company as integrated as GM seriously hope to go it alone in these difficult days for the auto industry? Have the OPEL managers ever heard of this thing called "globalization"?

As someone having at least a basic understanding of business, I cannot believe that everything which has been true until some months ago shall now no longer be valid. I think that at least our elected leaders should understand what is at stake here. If they cannot or don't want to, we must remind them. A global depression like the one in 1929 is looming. Everybody remembers what happened back then. Politics must get this message across to the people instead of falling back on short-term populist measures.

There is only one solution to this crisis: European and North American leaders must engage, using existing forums, and try to cooperate and deal with this global financial crisis. If we don't, we will all lose. Politicians must be honest with their constituents and tell them that this is the only strategy that will work in the long run. It has to improve on how these issues are communicated to the public. This is not an easy task. What is needed now is true leadership and courage on both sides of the Atlantic: Obama and European leaders must talk to each other and take brave action.

It is a promising sign that Germany's newly elected Economic Minister Karl-Theodor zu Guttenberg announced that Germany will work closely with the US on the GM/OPEL crisis. A joint working group has already been set up in order to determine the future course of action, and Guttenberg himself will travel to the US in mid-March in order to talk to US Treasury Secretary, Timothy Geithner. It remains to be seen, however, if the German government really has the courage to take tough decisions in the end. There are 28,000 jobs at risk in Germany and this is the "super election year", with European, National and Provincial elections looming on the horizon. We shall all monitor closely what happens in Washington and Berlin in the weeks to come.

Christoph Suess is a Freelance Reporter for the Main-Echo, Bavaria, writing on political and local issues.

Related materials from the Atlantic Community:

• Tyson Barker: The Case for Germany First
• Markus Drake: Germany Wins on Globalization, but Not All Germans are Winners
• Soyen Park: The Legacy of the Financial Crisis Awaits Us in 2020

March 9, 2009

Adam K. Svensson, Lund University, Bronze Contributor (22)

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I like this comment! What's this?

Christoph's article touches upon one of the major debates of these days; whether national governments or international governance is, or can be, the key to solving the current crisis. This issue can also be analyzed as being a so-called 'prisoners' dilemma' - individual rationality (in this case what is best in the short term for each nation) implies collective irrationality (in this case not being able to solve the crisis in a efficient manner). I agree with the author that European and North American leaders must cooperate in order to evade the abovementioned dilemma, but it is still far from apparent how such a solution would be designed. At the heart of the issue, though, lie questions like responsibility, legitimacy and accountability. These questions cannot, I believe, be neglected, since too many people consider them absolutely central to the discussion of how to deal with the crisis. Many people simply demand that the persons that reasonably can be claimed responsible for the crisis be held accountable for the decisions they have made. This mechanism is, despite its counterproductive effects, definitely real.

According to me, the above must be taken into consideration when laying out the plans for how to deal with this crisis. However, some things are certain:

1. Christoph Suess is absolutely correct that transatlantic leaders must cooperate in order to address the issue and thereby evade the 'prisoners' dilemma'.

2. New practices concerning the accountability of national as well as international actors must be included in the future policy making process. Without such considerations the market as a whole will be less stable and thereby be less than optimal as concerns the production of eligible goods.

3. The public must develop an increased understanding of the possibility that severe changes in e.g. the auto industry are due. In the areas of production that are no longer profitable, changes simply have to occur. Therefore, increased efforts in different developmental areas are needed.

March 9, 2009

Gerhard Randel, University of Manitoba, (2)

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I like this comment! What's this?

It is clear that the status quo must change. Mr. Suess is an apologist for the failed American auto elite. There has been enough talking with people who do not listen and will never change. Daimler-Benz learned that lesson with Chrysler. It is time for action. GM, like Chrysler and Ford, has for decades ignored reality and built cars in the US that people do not want to buy. The quality of GM cars in North America is among the worst in the world. Steinbrueck is correct. Opel should not subsidize the failed poliicies of GM management, who now come begging for huge sums of money from the US government because of their incompetence and mismanagement.

Germany should buy Opel and thereby get something for its money rather than continue to throw good money after bad with subsidies that only perpetuate the same failed management policies. With the resources of the nation behind it, Opel can forge a new direction in the ever-changing global environment that will ensure the long-term stability of the company and the job security for its workers.

March 14, 2009

Christoph Suess, Hanauer Anzeiger, Gold Contributor (77)

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I like this comment! What's this?

German's new, young fresh Minister for Economic Affairs, Karl-Theodor zu Guttenberg, has just said that he is willing to advocate a joint European position in the US on Sunday. He and his colleagues agree that further work has to be done before a decision will be taken on GM. To me such a coordinated European approach makes sense, since GM's activities in Europe are quite integrated too. Hopefully this provides for negotiations at the US-EU-level!

Tags: | auto industry | Opel | EU internal affairs |

June 20, 2009

Cristina Cárdenas

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I like this comment! What's this?

Good Article!!!

Tags: | auto industry |

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