Anatomy of a Reversed Foreign Divestment Decision: General Motors and Its European Subsidiary, Opel

DOI: 10.5176/2010-4804_3.1.299

Authors: Michael C. McDermott and Denise J. Luethge

Abstract:

During this recent period of economic crisis and rising unemployment, General Motors, the US multinational, announced its decision to sell off Opel, its loss-making European operations. Foreign divestment (FD) decisions are notoriously secret, and often very controversial, arousing strong opposition. Whilst such decisions are difficult to make, they are an essential aspect of corporate international business strategy. Plant closures that involve substantial lay-offs attract scrutiny from governments and policy-makers. This paper explores the recent major divestment proposals by these two global auto producers and the subsequent negotiations with governments in the home and host nations.

Keywords: Autos, Competition Policy, Foreign divestment, Globalization, Industrial Policy