Financial Times FT.com

German government

Berlin’s wrong turn

Published: September 16 2009 20:43 | Last updated: September 16 2009 20:43

Germany’s ruling parties must have been praying that the new owners of General Motors Europe would have the good grace to wait until after the September 27 election to announce how they will restructure Opel’s bloated production lines. No such luck. The ink had barely dried after GM signed Opel over to Canadian car parts maker Magna and Russia’s Sberbank when they announced they would fire one-fifth of the group’s 50,000 European employees within a year – 4,000 in Germany.

This should not have come as a surprise: the car industry’s troubles are clear for all to see. Global vehicle sales had fallen by 20 per cent from their peak by March; the boost from “cash-for-clunkers” schemes is bound to be temporary. Even a strong recovery would leave automakers with huge overcapacity. Against this background – which the sale of Opel does nothing to change – not admitting the necessity of job cuts is either delusional or dishonest to voters.

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