The German government should not offer Opel, the heart of General Motors’ European operations, any special aid, according to Daimler AG Chief Executive Officer Dieter Zetsche. He made this assertion at the company’s shareholders’ meeting in Berlin. Not only is it surprising that Zetsche would wade into this political quagmire, but the patent hypocrisy of his position is clear, where he endorses government aid to help Chrysler avoid bankruptcy, thereby cutting Daimler’s exposure of more than $1 billion in liabilities at the same time as he accepts German government aid for Mercedes-Benz.
Zetsche also admitted that governments are facing the full brunt of a global economic crisis.
“Just think about how quickly the most pro-market governments have moved to partially nationalize their country’s banking system in order to prevent a total meltdown of the global financial system,” Zetsche said.
“I emphatically approve of the decisive action taken by political leaders. After all, extraordinary circumstances call for extraordinary measures and governments simply have to step in when a crisis threatens the very foundation of our free-market system,” he said.
In fact, Daimler is using short-week benefits provided by the German government to reduce bloated inventories at a critical time. In addition, it is asking its 20 unions for $2.6 billion in concessions. Other German automakers, Volkswagen AG and BMW, are certain to follow suit if Daimler is successful, which is considered likely. Indeed, unions at Opel AG have already begun offering concessions in an effort to avert the historic demise of GM Europe. (more…)