E.U. upset by Opel’s new conditions

Marketplace Staff Jul 6, 2009
HTML EMBED:
COPY

E.U. upset by Opel’s new conditions

Marketplace Staff Jul 6, 2009
HTML EMBED:
COPY

TEXT OF STORY

Bill Radke: A few minutes ago, I told you a bankruptcy judge has cleared General Motors to sell its assets to a new company — that happened late yesterday. The other side of the bankruptcy is unfolding in Europe. GM’s Opel division is temporarily owned by the German government. Germany has injected $2 billion. It’s also helping Opel find a new owner with some conditions — conditions that other European countries don’t like. From Antwerp, Belgium, Brett Neely reports.


Brett Neely: Opel’s Antwerp factory is surrounded by huge, empty parking lots.

Keith Curtis spent 30 years in the factory. He says the scene doesn’t look right.

Keith Curtis: All that space you see over there was absolutely packed with cars. Always. Full of Opels. Yeah, it’s a bit of a tragedy, I’m afraid.

Curtis is one of the luckier auto workers in Belgium. Eighteen months ago, he took a big buyout and left the company. His former colleagues’ fate could be determined in Germany, whose government with temporary ownership of Opel is keen to protect the company’s 26,000 workers there — particularly with elections in September.

It shows just how little unity there is in the European Union these days, says Brussels economist Daniel Gros:

Daniel Gros: The pattern is almost always the same. Of course at the national level, the priority is national jobs, because you put in the money of national taxpayers.

It’s as if Illinois promised to bail out GM, provided it kept its plants open there, rather than those in Michigan.
There are 50,000 Opel workers across Europe, and this kind of aid that pits one E.U. state against another is against the rules, Gros says. In the middle of a crisis, that happens. Belgium, too, is trying to offer money to prospective buyers of Opel, but it’s a small country with much less cash.

Union leader Rudi Kennes fears for Antwerp’s 2,600 Opel jobs, despite government and labor concessions.

Rudi Kennes: It’s the same as I would turn around the whole evening around a beautiful woman. If she doesn’t want to go out with me, we probably won’t go out.

So for now, the Opel workers in Antwerp and other GM factories outside Germany can only hope for the best.

Economist Daniel Gros says government bailouts can only go so far. In the long term, automakers will follow the bottom line.

Gros: Then they will look again at the situation and say now, where are actually the cheapest places to produce? And then the economic logic will come back.

But will the jobs?

In Antwerp, Belgium, I’m Brett Neely for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.