Three years into their forced marriage with GM, the American taxpayers
have seen the value of their investment in GM deteriorate by
approximately $24 billion, largely due to continuing European
losses. Exposure in Europe has contributed to crushing the value of GM's
stock due to its chaotic and failing Opel unit in Germany. While
government, journalists and Wall Street sympathizers have given the
Obama Administration and GM leadership an almost incomprehensible pass
on this value destruction and massive loss (presumably due to the
macro-economic nature of the crisis), it's time to call for the
accountability that this new Board was supposedly going to deliver.
Overlooked is the value-destroying, cash-sucking disaster that is GM Europe was packaged and ready for sale to new European buyers in 2009 before the new Obama GM Board of Directors slammed the brakes on the deal, throwing GM into its current value free-fall. In fact, the decision to not sell the Opel operations (which has not been profitable for more than a decade) in 2009 after GM cleared bankruptcy was the very first major decision of the new Obama Board. Had Opel been sold, GM stock would be much higher than it is today.
In November of 2009, the governments of Russia, Germany and the US were engaged in a major international deal that would have seen the global auto parts manufacturer Magna purchasing a majority portion of GM's failing Opel unit through a combination of public and private funding coming from Russia and Germany. Then interim GM CEO Fritz Henderson made the controversial decision to simply sell the unit off. The cost of fixing Opel and ridding the company of the over-capacity was a task that would cost into the tens of billions of dollars, if it were possible at all due to the legal and political obstacles in the way.
Read more: http://nlpc.org/cached/auto-bailout-legacy-gms-european-nightmare.html?q=stories/2012/08/16/auto-bailout-legacy-gms-european-nightmare
Overlooked is the value-destroying, cash-sucking disaster that is GM Europe was packaged and ready for sale to new European buyers in 2009 before the new Obama GM Board of Directors slammed the brakes on the deal, throwing GM into its current value free-fall. In fact, the decision to not sell the Opel operations (which has not been profitable for more than a decade) in 2009 after GM cleared bankruptcy was the very first major decision of the new Obama Board. Had Opel been sold, GM stock would be much higher than it is today.
In November of 2009, the governments of Russia, Germany and the US were engaged in a major international deal that would have seen the global auto parts manufacturer Magna purchasing a majority portion of GM's failing Opel unit through a combination of public and private funding coming from Russia and Germany. Then interim GM CEO Fritz Henderson made the controversial decision to simply sell the unit off. The cost of fixing Opel and ridding the company of the over-capacity was a task that would cost into the tens of billions of dollars, if it were possible at all due to the legal and political obstacles in the way.
Read more: http://nlpc.org/cached/auto-bailout-legacy-gms-european-nightmare.html?q=stories/2012/08/16/auto-bailout-legacy-gms-european-nightmare
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