General Motors Co.'s
decision to renege on its plan to sell its Adam Opel GmbH European unit to Canadian auto parts maker Magna International Inc. (NYSE:MGA) is a strong statement from the board that it is running the show at GM, not the U.S. government.
The news, announced Tuesday following a board meeting, may have been as much of a surprise to the Obama administration as it was to the German government. But whether it was an unwelcome surprise to the White House is unclear. So far the response has merely been confirmation that the administration was not involved with this decision.
In fact, this is the second time GM has swerved from its original,
post-bankruptcy (and government-approved) restructuring plan, as
Bloomberg points out. The company said Sept. 30 it would wind down the Saturn brand
after a sales agreement with auto retailer Penske Automotive Group Inc. (NYSE:PAG) fell
through.
The American taxpayer is in deep when it comes to GM, and it was only recently that Steve Rattner, Obama's former "car czar,"
detailed
the magnificent incompetence of GM's upper management. Granted things have
since changed, the most obvious being the replacement of CEO Rick
Waggoner by Fritz Henderson. But no doubt remnants of the "old GM"
linger -- can a massive corporate such as GM undergo an ideological
shift in just a few months? -- and if the administration has reservations over the
company's ability to turn around Opel internally, they would certainly be justified.
Either way, it's a definite sign that bulky, bumbling GM is growing up
-- and this should make us happy, if not a little nervous. -
Sara Behunek
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