The new General Motors is going to be a strange enough entity—a state-owned automaker with its own union and the government of Canada on board as major junior partners. But the situation in the new GM Europe, which is mostly composed of Opel, is even odder. It initially looked like Opel was going to be sold to Fiat, which is also buying Chrysler, as part of Fiat’s campaign to become a legitimate first-tier player in the auto market. But Magna, a Canadian car parts company (that’s also to some extent Austrian), was also interested in Opel. And the German government seems to have decided that a Magna-owned Opel would preserve more German jobs than a Fiat-owned Opel would. So the Germans helped stitch together a deal also involving Sberbank, a very large state-owned Russian bank.
And part of the appeal of that to the Russian government is that GAZ, Russia’s number-two car manufacturer, will now start building Opel cars on its assembly lines rather than terrible, terrible GAZ cars. Thus, jobs will also be saved in Russia.
In other words, the Russians and the Germans appear to have taken action to guarantee even more overcapacity in automobile production. And with essentially all global automakers operating with some level of government support, it’s hard to see how anyone can stay in the game without continuing government support. At some point, aren’t we going to have to start unraveling this?