GM may not know how to design a car people want, but it does know a thing or two about bailout arbitrage. Before GM's first ride on the bailout/bankruptcy merry-go-round, it agreed to try to spin off its German arm, Opel. Having missed out on the opportunity to get Opel fully involved in the bailout sweepstakes the first time around, GM looks set to make sure the US government gets stuck with part of the bill the second time.
General Motors is looking at shelving a German-backed bailout of its Opel European car arm amid growing fears that long-running talks on the deal will end in failure. The US carmaker and its advisers are studying a scenario that would see GM abandon the German plan and instead raise roughly €3bn ($4.3bn) of rescue funds for Opel and its British Vauxhall brand from the US and other European governments, including the UK and Spain.
And with that, the seeds of the forthcoming Troubled Auto Relief Program were sown.
GM looks at shelving Opel plan [FT]