Auto maker General Motors is grappling with the future of its European units Saab and Opel after one sale collapsed and the other was pulled, targeting the bulk of its 9,000 job cuts at Opel’s German factories.
After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.
Announcing a third-quarter operating loss, the government-owned automaker said it would begin paying down its $6.7 billion debt to the U.S. government ahead of schedule. Most financial experts would agree that paying off debt is a good thing.
General Motors may soon get the long-delayed green light to sign over carmaker Opel to Canada’s Magna. EU antitrust regulators have no plans to block Magna’s acquisition of GM’s European arm, a European Commission spokesman said in Brussels, easing fears the transaction could run out of gas in debate over German state aid to the mostly German-staffed company.
GM’s Lordstown, Ohio assembly plant has become a symbol of both GM’s hard times and its best hopes for a turnaround after a $50 billion federal investment. A recent bump in sales because of the government’s “Cash for Clunkers” program has allowed GM to call back more than 1,000 workers from layoff. So it was a natural backdrop for a return visit by President Obama, who held a roundtable with workers and then gave a stump speech from the factory floor for his economic policies and health care reform. But this is not your father’s GM anymore and nothing about it as clear-cut as it seems — even if you are the leader of the free world and head of the government that holds a controlling stake in the automaker. At one point, Obama — veering from his prepared remarks — suggested that health-care reform would allow the UAW-represented workers in the audience to negotiate better wages.