|
General Motor's bankruptcy filing has prompted speculation about the fate of its operations around the world.
In the build-up to what is the third-largest bankruptcy in US history, filed in a Manhattan court room on Monday, governments and manufacturers have been bracing to deal with the fallout.
General Motors (GM) employs nearly a quarter of a million people in 140 countries and many are concerned for their jobs.
Governments in Europe, already struggling with the global economic downturn, have scrambled to secure GM's operations in their countries.
Germany last week announced its plans to save GM's European operations, agreeing a deal with Canadian car-parts group Magna and its Russian banking partner Sberbank to take over most of GM Europe, which includes Germany's Opel and Britain's Vauxhall brands.
While Germany emerged fromt the talks with what appeared to be guarantees that no Opel plants would close, there was uncertainty over the fate of Vauxhuall workers at plants in Luton and Ellesmere Port in the UK.
"There are so far no guarantees that the jobs in Britain, or in other places like Spain and Belgium, are going to be protected under this plan," Nadim Baba, reporting for Al Jazeera from outside the Vauxhaul plant in Lutton, said.
GM in Britain, which employs about 5,000 people, said it would take five or six weeks for the details of what GM will produce and where it will do it to be decided.
British unions have sharply criticised the UK government for failing to do more to safeguard jobs.
"The Germans have been central to this. We appear to have been on the sidelines," Derek Simpson, the joint general secretary of the Unite union, said.
Major employer
Elsewhere in Europe, a Swedish court approved a three-month extenstion to Saab's restructuring process last week.
|
Under Chapter 11 the company's management remains in place but a company is given greater freedom to restructure both its finances and its operations, though all major business decisions must be approved by the court.
Prior to filing for Chapter 11, a firm usually submits a plan for how it will return its business to profitability.
The plan needs to be accepted by the company's creditors, bondholders and stockholders, but even if it is rejected the court can confirm the plan as long as they judge it to treat all parties fairly.
|
The Trollhattan-based firm went into creditor protection, Sweden's equivalent of Chapter 11, on February 20 as GM attempted to spin off or sell the unit.
Saab employs about 3,400 people in Sweden and about 15,000 jobs, including suppliers, are believed to be at risk if the company were to disappear.
US consumers will also be affected by GM's Chapter 11 filing. GM car owners will be worrying where they can service their vehicles as the company plans to close 1,000 to 1,200 underperforming locations around the country.
The company also expects dealerships to close, with plans to shut over 2,600 dealerships by 2010.
But others have more upbeat about the situation.
'Business as usual'
Bill Lay, the managing director of GM's East Africa operations, said the subsidiary remained profitable.
A statement from Lay's office to Al Jazeera said that it was still "business as usual".
In the Middle East, a senior manager from GM in Egypt also insisted the the company's Egyptian subsidiary would likewise be unaffected.
"We are very profitable. Last weekend we advertised new jobs and we are the number one taxi provider in Egypt. We are not affected at all," the official, who declined to be named as per company policy, told Al Jazeera.
Foreign car makers have taken steps to protect themselves from GM's bankruptcy filing, stocking up on extra components to prevent disruption in case suppliers go bust.
Japan's government said on Monday it was ready to assist Japanese companies, including hundreds of car-part suppliers, hurt by GM's bankruptcy.
It may not be all bad news as GM's decline could offer opportunities for GM's competitors, many of which will be hoping they can grab part of the market share that becomes available as GM resturctures.
|