UAW’s Wall Street Friend Takes Over GM Europe
General Motors has announced that Vice Chairman, Steve Girsky, will be taking over its European Operations. According to one article, "Several trade union bodies are broadly welcoming the appointment of Steve Girsky." That makes sense, as Mr. Girsky was appointed by the UAW to serve on GM's board.
Mr. Girsky's past experience centers on Wall Street, where he spent 20 years, mostly at Morgan Stanley. According to cmaturbo.com, "Girsky earned the UAW's trust during his analyst days, when he often presented to the union his unvarnished take on the deteriorating financial health of the Detroit 3 and suppliers, sometimes at no charge. In 2009, when the UAW retiree benefit trust got an equity stake in GM as part of the federal bailout, then-UAW President Ron Gettelfinger picked Girsky as the trust's representative on GM's board."
GM's continually struggling European operations remain as one of the anchors around its neck. Costly labor obligations, including $25 billion of under-funded pension obligations, are another. It will be difficult for Mr. Girsky to improve the situation in Europe without asking for sacrifices from his union friends. There is no magic bullet and the "unique template" of GM's American bankruptcy process does not apply to European bankruptcy laws.
We'll have to give GM the benefit of the doubt that the European leadership decision is based on Mr. Girsky's credentials as opposed to his connections. It is possible for someone to be both qualified and politically connected. It's just a shame that we always have to wonder because of the continued involvement of the Obama Administration in GM as they refuse to end the governmental intrusion into the industry.
General Motors and the American auto industry are important to the country, but it is time for companies like GM, Chrysler and Ally Financial (which is still government-owned and provides financing for both GM and Chrysler) to sink or swim on their own. Unfortunately for the European unions, real sacrifices may have to be made to prevent the sinking of GM Europe; despite how friendly they might think Mr. Girsky is to their cause.
Mark Modica is an NLPC Associate Fellow.