President Obama’s June 1st. deadline failed to force GMC’s creditors into a negotiated solution to avoid bankruptcy. The world champions of free-trade once more had to step down from traditionally a liberal stance on private enterprise to solemnly announce government intervention in yet another private stock-exchange quoted corporation.
Previous negotiations to ease off the financial strain by getting rid of GMC’s European operations reached a tentative agreement to sell out to MAGNA STEYR, the Canadian-Austrian car parts manufacturer. Concentrated in the GM Europe group with factories in Germany, France, Belgium, Spain, United Kingdom, Poland, Sweden & Russia producing European brands such as OPEL, SAAB & VAUXHALL and distributing American models and Korean-produced DAEWOO (sold as CHEVROLET), the European GM operations involved roughly 1/5 of its total 250.000 worldwide workforce.
Assuming the EU’s intervention headed by Germany and its four affected Länders, the GMC crisis is far from a realistic solution. The Obama Administration failure to convince creditors, a large number of which are bond-holders, has forced the 60% takeover solution with an enormous disbursement from the U.S. public budget. It must be remembered that such funding was not only applied to the CHRYSLER crisis which may finally have a less tragic ending should Italy’s FIAT merger plan succeed, but also in the still quaky banking insolvency mess.
GMC has finally bowed down to what I pointed out as the fatal error of not applying Deming’s TQM which ended in TOYOTA’s factories instead. Ever since then, the U.S. automotive industry has slowed down to finally lag behind their Japanese competitors. Even efforts to participate in Asian operations such as was the case of GMC’s DAEWOO takeover in 2002 was insufficient to change the American giant’s TQM and strategic management philosophy.
Chapter 11 for one of the American Dream’s hallmarks must prove shocking for most U.S. citizens to have been taught that such brands as CADILLAC or COCA-COLA are truly American contributions to the rest of the world.
President Obama has indeed arrived as times required enormous changes not only to face up to economic crisis but also for the average American citizen to understand that the United States of America is a great nation that needs to examine its most elemental beliefs. Only then will the majority understand that the New Millennium has brought about something more than the tragic 9-11 that shook American society into crude reality. ¿Will “The Establishment” anchored in Washington D.C.’s powerful halls and lobbies let Obama play his cards? I wonder.
Madrid, June 2, 2009