On Friday, a General Motors regulatory filing revealed that GM lent its European Opel division $900 million in November 2009. The funds were used to maintain operations and to repay a loan from the German government.
Moreover, the filing showed that on January 4, 2010, GM accelerated its $930 million payment to Opel for engineering work, intended to keep Opel operations afloat until more permanent financing is arranged.
The GM Authority Take
It’s no secret that the current economic landscape makes it very difficult for most automotive conglomerates to turn a profit, especially with today’s lowered sales volumes and immense overhead. That said, sales are on a slow, yet seemingly steady, upward trajectory. So while automakers aren’t able to meet their sales targets no matter how good their vehicles are, what they are able to do is be ready when the market recovers.
Since Opel plays a very instrumental role in engineering, researching, and developing some of the most important vehicle architectures for General Motors (Epsilon, Delta), it’s necessary for The General to invest today for a brighter tomorrow. That’s exactly what it’s doing here. Most recently, GM approved a $1 billion program to redesign its Chevrolet Silverado and GMC Sierra pickup trucks.