Gosudarstvennyi Motors

Now that the shock of General Motors’ bankruptcy has passed, it may be a good time to examine the role played by several governments — including Russia’s — in shaping the outcome.  As befits a multinational industrial corporation, General Motors impacted the economies (as well as the consumers) of nations around the world.  When GM fell off its pedestal, governments from Mexico to Moscow strained to keep damage to their national economies to a minimum.

Opel, GM’s brand in much of Europe, was the most obvious offshore casualty of GM’s demise.  While most of its production is in Germany, Opel/GM had workers, factories and joint ventures throughout the continent, including Spain, the U.K., Poland and Russia.  (Sweden’s Saab was also part of the GM empire.)  Angela Merkel spared no effort to ensure that Opel’s new owner would keep German job losses to a minimum.

Thus the remarkable effort by the German government to undercut Italy’s Fiat, which had bid to buy Opel (and challenge Volkswagen as the dominant car maker in Europe).  Merkel knew Fiat’s management would have no sentimental attachment to Germany’s 25,000 high-wage Opel workers.

Enter Magna, a Canadian auto parts company, and Sberbank, Russia’s largest (and government-owned) bank.  Merkel threw the weight of the German government behind a proposal under which Magna will buy a majority stake in Opel, and Sberbank buys a large share as well.  General Motors, once it emerges from bankruptcy, may end up still owning a minority stake in the “new” Opel.  The same General Motors in which the U.S. Government now owns a majority share.

In the end, Berlusconi and Fiat were no match for the Merkel-backed consortium.  Fiat gets to own Chrysler, once owned by Germany’s Daimler, and now emerging from bankruptcy thanks to its new Italian owners.

All of this was becoming public yesterday at the the same time that Vladimir Putin, in St. Petersburg, was inaugurating the latest foreign car factory in Russia — for Japan’s Nissan.  Just last fall, a nearby GM factory was inaugurated by Medvedev and the U.S. Ambassador to Moscow.  (See my post from that event here.)

America’s Ford Motor Company still has a factory in Russia and, for a while at least, Ford has no government ownership — neither U.S. or Russian.  But the national identity and ownership of American car manufacturers has just taken a hit, at home and abroad.  Soon the Italian tricolore may be seen on display in Detroit.   But, in Eisenach, it’s the Russian flag that has a new home at a factory that Bill Clinton once festooned with the Stars and Stripes

PS:  The Detroit News is now reporting that GM has off-loaded its Hummer brand to a Chinese company.  Yes, The Hummer, famous for its military lineage (Humvee), once assembled by GM in Kaliningrad for the Russian nouveau riche, descendant of the High Mobility Multipurpose Wheeled Vehicle, so successful in the First Gulf War.  To China.  So add Beijing to the list of governments now picking up the pieces that were once General Motors.