GAP funding features in the next phase of the St Paul’s Square development in Liverpool city centre.
The need for public money to subsidise the region’s commercial property market is something we had hoped we had seen the back of, at least in respect of city centre developments.
Indeed the first two phases of St Paul’s Square were completed and sold without the need for government cash. However those deals were completed more than two years ago, when market conditions were more robust.
Arguably, it is a little surprising that anybody is putting fresh money into the commercial office market at the moment, in Liverpool or anywhere else. The investor behind the latest St Paul’s phase is English Cities Fund, which is part-owned by a public sector regeneration quango, the Homes and Communities Agency, and the private sector’s Muse Developments and Legal & General.
As our feature on this page shows, the city needs new office space, so its good to see the optimism underpinning the private cash in the scheme. The news that there are currently two big public sector requirements in the market place at the moment will have helped secure their willingness to press ahead.
THE collapse of General Motors into Chapter 11 bankruptcy is a huge milestone in the evolution of the global economy.
Chapter 11 gives GM breathing space to reorganise its affairs and come up with a court-supervised plan that will see at least some of the car firm’s creditors get money back.
GM was one of the icons of the US economy, employing many hundreds of thousands of people.
It is now a shadow of its former self, with a workforce of just 30,000 in North America.
We all know about the causes of GM’s demise. It was too unionised, paying lavish welfare and health benefits to its current and former staff, a gesture that was far too great a burden for it to carry in the light of growing competition from Far East countries.
Even within the US, there are at least two distinct labour markets. In the traditional industrial north, workers are paid about $100 an hour. In the southern states, where the Japanese and Korean-owned plants are located, the non-unionised car factory labour is paid $50 an hour. Those cost differentials have got to make an impact on selling prices in America’s showrooms.
The big question is what will replace the lost skilled jobs? I suspect the answer is nothing. Instead, demand for skilled manufacturing labour in the West will continue to fall. Looking ahead to the next generation, those car workers should be advising their own sons and daughters to think about careers in other fields. To earn good incomes, more people will have to go to university and obtain a postgraduate professional qualification.
And that’s a worrying development that will divide society between the professionally- qualified and those with neither professional qualifications nor skills.
The one GM creditor that won’t be getting much, if any, money back is the US government.
Clearly it was politically difficult for President Obama to allow GM to go bust altogether, but has he done anything more than postpone the day that comes to pass?
