The rescue of the American automobile industry reads much like the chronicle of an announced coup. Where GM and Chrysler's management failed, the government now takes the wheel. Not in order to save the business with government money, but to come up with a workable plan for a long-term solution.
President Barack Obama has made a clear choice. The restructuring is deep and merciless, as this appears to be the only solution for the ailing auto industry.
One must hope that the alliance with Fiat, announced after Obama's fire-and-brimstone sermon, will succeed for Chrysler's sake. Otherwise, it is all over for Chrysler.
It is different for GM. For years, its management has botched the icon of the American automobile industry. Obama acknowledged that Washington has also had its way for too long. In order for [the auto industry] to become endurable, a radical restructuring must take place. By rejecting the automakers' vague plans and, in the case of GM, by heavy-handedly changing its management, Obama did not leave anything in doubt.
He wants the carmaker to reinvent itself and once again become an icon, but a 21st century icon. The American president does not see any merit in steering billions to an industry that refuses to adapt itself to the modern world. The government must not work as a shareholder. Obama does not want to throw tax revenues into a bottomless pit. That is brave because it is certain that the future can only be attained through difficult sacrifices by all those concerned. Here too Obama does not leave anything in doubt.
For the workers who depend on the automobile industry, restructuring is a bitter pill. For years, they have sacrificed and have seen more and more jobs disappear but never had a solution in sight.
It now remains to be seen whether GM can rise again under great pressure and with the White House's help. It is certainly a break with the past. The introduction of policy that does not rely on subsidies this time but rather on capital insertion. The task force that Obama has put together to monitor the auto industry does have a good idea about which direction to follow. That is more than can be said about GM's management.
There really is no talk of protectionism in the new plans for the auto industry. Of course, the rescue is aimed towards American (and Canadian) companies. But the support is also tied to its future.
The question that remains is, what will happen to GM Europe, and to Opel in particular. Obama did not mention Europe in his address. What matters to him is saving the American companies. If European politicians are still planning to nurse Opel, then they had better start doing their homework with much haste because the clock ticks for Opel at the same rate as for GM. Time is almost up. Here too, decisions have to be made. And, just as in the U.S., they are probably not the most pleasant ones.