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It’s the start of a new working week in the northern hemisphere, which means it’s non-stop bailout coverage once again. Well, I hope not, but that’s how things seem to have trended in recent weeks. It’s an absorbing story because it within the bigger story of GM’s survival is the story of Saab’s survival.

Or is it?

There’s been a lot of talk about the ripple effect if GM were to fail, but that talk has been focused on the fallout that would take place in North America.

What about GM Europe and GM’s other operations around the world. What about Holden here in Australia? When the Australian government recently announced a green vehicle fund to be shared amongst Aussie automakers they were all talking like the future was totally rosy. The crisis at GM was the un-mentioned elephant in the corner of the room.

Won’t the Australian operations shut up shop completely if the corporate parent goes under? The same question applies to GM Europe, but a recent story about GME made me think that there’s hope even if GMNA sinks.

GM Europe chief, Carl-Peter Forster, met with the German Chancellor Angela Merkel earlier this week to try and secure some funding for Opel. It read as follows:

<blockquote>Desperate executives from German automaker Opel turned to Chancellor Angela Merkel on Monday for government help in case US parent company General Motors goes bankrupt and leaves it high and dry.

Opel said on Friday it needed the German state to guarantee more than one billion euros (1.3 billion dollars) in loans, fearful that cash coming from GM headquarters in Detroit could dry up and leave it unable to pay its suppliers, creditors and 25,700 employees…..

…..GM Europe chief Carl-Peter Forster said that he had asked for guarantees of just over one billion euros (1.3 billion dollars).

“We felt obliged to make sure that even in the worst-case scenario, including when it comes to developments in the US, the continued survival of Adam Opel GmbH is assured,” Forster said.

My emphasis added.

The “worst case scenario” for GM is an inability to get a bailout package from a stubborn bunch of lame ducks in Washington, followed by a reasonably quick slide from Chapter 11 bankruptcy to Chapter 7 liquidation due to an inability to secure the finance it needs to get through C11.

So is Carl-Peter Forster saying that even in this worst case scenario, that operations at GM Europe could continue? What’s the model for this?

And most importantly for us, what about Saab in that situation? I have a feeling that they’ll need to go cap-in-hand with Volvo to the Swedish government for help, and I assume they’d have to do that as part of GM Europe.

There are so many questions here.

Can GM Europe be spun off from the corporate mothership if it falls?

What does all this mean for dealers? In Europe? In the US? In Asia?

If you’ve got more info than what’s being published in the news services, please let me know.


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