The once mighty General Motors, unable to survive by meeting the needs of customers turned to the taxpayers for a bailout in the U.S. In Europe its Opel subsidiary required similar life support from the German government. However, GM wanted to get help in a way that enabled it to continue to benefit from Opel. Review the Opel case on page 91-92 then develop a response to the following questions:
1.What are the costs and benefits of FDI inflows for a host country such as Germany? (Be specific please)
2.Will foreign firms such as GM always make decisions in the best interest of the host country? (Support your response with examples)
3.In an effort to preserve German jobs, the Magna plan would close a more efficient plant in Spain. What would you do if you were a Spanish government official? What if you were a German official?
4.How would you vote if you were a member of the GM board regarding the fate of Opel? (Please keep in mind that what GM ultimately did was not necessarily the best option.