The union Unite has called GM’s sudden decision to withdraw from selling Vauxhall as “great news”. In fact it may not be the good news they think it is.
The situation is now no better than the one they were in when GM announced the sale. At least with the sale there would have been a limited restructuring negotiated as part of the deal, with only 600 voluntary redundancies. Now GM will be free to restructure themselves, probably with wider redundancy implications. With even controlled administration not being out of the question.
Germany who greatly favoured the Magna deal, are a little irked (vast understatement) as they have promised aid for GM and has loaned them â‚¬1.5 billion. Money they might want back right away now. But in Britain Lord Mandelson has said that GM would possibly get government support of it kept Vauxhall on its books.
The whole deal is now stuck in limbo. GM want to make the whole thing profitable and the unions will want GM to make assurances on jobs. Lord Mandelson has also called for urgent talks with GM probably just for this reason.
Fritz Henderson, GM’s president and Chief exec, has pointed to good sales figures as the reason for changing their position.
The increased sales probably owe much to all the scrappage schemes being operated across the world. These schemes, as far as GM are concerned, have had the desired result in that they have kept the wolf from the door. In fact Germany helped shoot itself in the foot with regard to that when it extended the scheme in April 2009. Thus helping ultimately to queer their own deal.
What we may have is a ‘car bubble’ created by taxpayers’ money that is keeping companies afloat. Companies (not just Vauxhall) that should otherwise have been allowed to fail and / or be restructured.