Well, Foreman called it wrong. I thought Fiat would get control of Vauxhall and Opel, but the giant Canadian car-components-maker Magna won. I was looking at it from an automotive point of view, and the result was skewed by politics.
Once it was clear Opel-Vauxhall’s American parent GM started sliding towards today’s bankruptcy, GM had to cast aside its European operations to a new owner. The German government, the German unions, and Opel-Vauxhall’s German-domiciled management always wanted Magna, not Fiat, to be that owner.
Crucially, Magna had more or less promised to save most jobs in the German Opel factories. And indeed Magna has a very good record of looking after its employees. The German Government takes a far more hands-on role in industrial policy than our British Government does. It knew there would be votes in saving German jobs.
So the German Government promised loan money to Magna if it keeps the German lines running. A bit of a stitch-up?
Our business secretary Lord Mandelson gets his face on the news saying he wants to save the Vauxhall factories, but doesn’t do a whole lot about it.
By the way, even if Vauxhall’s Ellesmere Port were eventually to shut, Vauxhall wouldn’t be dead. We’d just get our Astras from Germany with Vauxhall badges, just as at the moment we get our Corsas from Spain with Vauxhall badges.
If Fiat had taken over, there would probably have been more and quicker job losses overall, and especially more in Germany. And Opel management and engineers simply didn’t like Fiat. They’d worked with them before, on the Corsa/Punto platform. I talked to them over the past days and they didn’t try very hard to hide their distaste for going there again.
But I still think Fiat would have made more long-term sense. There are simply too many car plants in Europe. These factories cost mountains of money to keep open, and paying thousands of workers costs a fortune too. If a plant is turning out cars at full stretch, that’s fine, but if it’s running slack, it haemorrhages money. And in Europe, there are too many of those slack plants.
Sadly, amalgamating some companies and cutting costs by component-sharing is the only way forward. Maintaining Opel/Vauxhall as a separate company under Magna probably only delays the evil day that closures arrive. (Unless by some chance a reborn GM North America flourishes and can eventually buy back Opel-Vauxhall.)
Remember how MG-Rover became an independent company after BMW abandoned it? Didn’t last long did it?
And Saab looks even shakier. It was until recently part of GM Europe, but Magna didn’t want it, not the brand or the factories. So the Swedes are still looking for their own white knight.