As Detroit awaits the timing and shape of its $14bn assistance package from Capitol Hill - the Presidential vacuum denying substantive leadership - across the Atlantic in the EU region politicians have been rather more forthcoming.
The trouble is that in doing so for their own national interests, and consequential ruling party favour, the very basis of the EU as a collaborative project to gain global strength, is coming under intense pressure; slowing its progress to a virtual standstill, if not fatally fracturing the uni-border set-up.
Self-interested national mindsets seem to have been born and latterly crystallised by the damage-limitation reactions created by the financial melt-down that has hit Europe over the last quarter. Given the opacity, indeed invisibility, of the CDOs and SIVs that were the undoing of the inter-connected global capital market, and the rapidity of Iceland's fall from grace there has been rapid reaction to 'bolt-down the hatches' where feasible. A case for many Central Bank and Treasury officials of grabbing as safe a seat as possible once the music of free-flowing capital markets revealed itself as instead a game of musical chairs.
Trust in internationalism, for the time being at least, seems depleted; none more so than in the EU. Although there is the usual rhetoric of "mutual solutions' espoused from Ministers, Commisioners and MEPs in Brussels, the individual national reality has been very different. In an attempt to counter an ongoing "tearing up the EU fiscal rule-book" Jean-Claude Trichet (the ECB President) has rebuked the trend to individualism witnessed thus far, and insists that the EU's "stability and growth pact" is still valid given (apparent) flexibility budget/debt rulings for those core members with larger economies and consequent economic leverage.
But the truth is that Germany, with the most cautious fiscal & monetary policies and a consolidated, re-strengthened industrial hub, stands apart from the rest of the membership - importantly Framce, Italy, Spain and Greece. They have been more exposed to the rapid change in the financial fall-out that has affected either commerce or housing sectors. (The 'spread' - or default risk premium - between German government-bonds and those of other member states tells of the capital market's caution and its EU flight to safety under the German umbrella. This in itself strengthens Germany's position and enlarges the 'confidence gap' between it and other states).
And of course as a major pillar of the EU economy, the region's auto-industry is a central component of the EU Project, now perhaps more than ever. But at a time when that belief in inter-dependent harmony should be heavily demonstrated, the self-interest in individual national auto-sectors has availed. Perhaps unsurprisingly after Angela Merkel's independent initiative to defend Germany's banking sector with government guarentees, it was she who first stood to protect Germany's auto-sector with mention of a 1bn Euro guarentee for Adam Opel AG when the woes of its US parent were highlighted.
That action previously stood in sharp contrast to the ambitions of France's Sarkozy and Italy's Burlesconi, who have been leading a call for an EU-wide solution to the region's car-making profitability problems. One that subtely intimated that a multi-member contributed fund could aid the increasingly interdependent sector, allowing it set within a planning framework to meet its combined challenges of over-capacity, product proliferation, CO2 reduction ambitions and the chasm caused by a historical reliance on now essentially defunct consumer-credit.
investment-auto-motives believes both the French and Italian Presidents could well be proposing the beginnings of what could ultimately be radical reform and a new era for the European auto industry and the consumer use of its vehicles. The results of such a possible reform could be years away, but whilst at this critical historical juncture these were perhaps efforts to make a start on that transformation.
Burlesconi will be conveying the wishes of FIAT SpA that seeks greater inter-company alliances and indeed legal partnerships as a solution to its declining fortunes and the need to repeat the JV success of its 500 city-car (with Ford) in the mid-car segment (with another partner) to reach today's 400m+ unit platform ideal. On the other hand, looking past today's immediate challenges, Sarkozy will be conveying the calls of Renault SA's respected CEO, Carlos Ghosn, who is pushing to take the first baby-steps towards a new era with all-electric vehicles and 'pay-as-you-go' business models. Given the French government's major stake-holding in Renault, Ghosn undoubtedly seeks EU or French funding as the 'fiscal starter motor' to encourage consumer momentum toward this new auto- world, one which is orientated toward greater free cash flow and more buoyant balance sheets that allow a company to operate more autonomously; as a dynamic 'brand enterprise' as opposed to heavily baggage laden conventional auto-maker. That in turn theoretically permits Renault to rely less on the French tax-payer in future.
For the moment, given the stalled collaborative EU action on the fiscal front, let alone auto-sector issues, a unified approach toward the challenges of the sector looks less and less likely without Brussel's leadership and German accordance. And that's an accordance which given its efforts to strengthen its domestic auto-sector - putting the likes of VW, Daimler and BMW onto a stronger footing comparative to their peers - looks ever more remote, unless to Germany's advantage.
Given these circumstances it was not surprising that Sarkozy decided to, like Merkel, 'go it alone', as Berlusconi may well have to do; replaying decade after decade of government patronage towards FIAT. Having met with met with car executives from Renault, PSA and Valeo at the Elysee palace, Sarkozy charged minister Luc Chatel to devise a plan by the end of the month to "save" 'Automobile Francais' which reportedly directly or indirectly employs 10 percent of the country's workforce. This appears to be fait accompli given the 26bn Euro aid package his government gave previously, the 100bn Euro package now stated and the promised 1bn Euro loan facility to Renault and PSA.
But although the Review is set to examine the sector's structure (especially supply-chain) and R&D priorities leading to overall investment strategy, the time-frame looks far from plausible to undertake an indepth and thorough job that creates efficiencies instead of simply paying for the wish-lists of domestic VMs and suppliers. So ultimately instead of creating a rational base for a more collaborative European auto-sector, it could well be that politics and national pride conquers the ambitions of the EU Project, its imperitive and rational.
That for Europe would be a mistake, and Brussels needs to demonstrate its industrial policy might by instigating its own EU Auto Review that depicts the operational and profitability advantages of cross-border internationalism over the spiralling tax-payer costs of domestic protectionism.
So at a time when the EU is supposed to be acting as the vanguard of the industrial Eco-cause, creating efficient industrial infrastructures that produce CO2 'tread-lightly' vehicles and conjoin cultures and consumer mindsets under the Green banner; the very mettle of it's leadership is being tested.
At its 10th anniversary, If the EU does not 'walk the walk' why on earth should a more cynical Russia, China or India?
That leaves the door open for Preseident Elect Obama to seize this opportunity to mould US-EU and global foreign policy, using Autos as a 'prime-pumper'. And crucially, enabling the US to access and productionise the best of the EU's presently latent eco-tech. How would that go down in Brussels?
To avoid that outcome, the EU Commission, the ECB, other possible stake-holders (eg the EBRD - European Bank for Reconstruction & Development) and ironically but critically senior investment banking figures, may have to come to the cause of economic rationality and unify the unfortunate present and growing tri-partite.