Democrats want to portray their support for General Motors as a model for the country’s economy, but a peek behind the curtain shows the company still struggling to regain its footing.
“I’ve got a little bumper sticker for you,” Vice President Joe Biden shouted at a Labor Day campaign event in Detroit, “Osama Bin Laden is dead and GM is alive!”
The Democratic Party platform claims GM is stronger today because of Obama and that he created or saved more than one million jobs in the automotive industry, but almost two-thirds of GM’s jobs sit in a country not named the United States, according to a Forbes report.
Since 2009, the company has invested heavily overseas, especially in China, even as it shuttered plants in the United States, including the plant in Janesville, Wisc.
But politics has also extended the life of GM’s investment in its money-losing German subsidiary, Opel.
A President Obama-appointed GM board had an opportunity to sell Opel in 2009, but decided against it to maintain the appearance of success.
“Opel has been losing millions of dollars and there’s no end in sight,” said Effraim Levy, a Standard and Poor’s Capital IQ analyst. “GM would be significantly more valuable without Opel.”
The decision to keep Opel also damaged U.S. foreign policy in Germany, according to a WikiLeaks cable.
Before GM reneged on its decision to sell Opel, German Chancellor Angela Merkel had publicly praised the pending sale after speaking with Obama, according to an Associated Press report.
“Opel has been given prospects for the future,” Merkel said at the time, unaware that Obama’s allies at GM would shortly back out of the deal.
“The failed sale of Opel (in 2009) is one of the worst setbacks in Chancellor Merkel’s chancellery. Never before has she been publicly taken for a ride. … She now looks naïve, uninformed and deceived,” said the WikiLeaks cable citing German media reports. “Merkel has lost, Obama has won.”
GM spokesman Jim Cain said the company kept Opel in 2009 in order to give GM the best economy of scale. “The thought was we could be successful in the long term,” Cain said. “We needed representation in the European market.”
Ford has also struggled in Europe, and Opel’s woes are nothing new, Cain said.
GM kept Opel in order to maintain GM’s compact and midsize car engineering and sales volume, according to a Bloomberg report.
Cain said GM is working to improve Opel by negotiating with German unions, but Levy said fixing Opel is not going to be simple.