As General Motors posted a profit of $7.6 billion for 2011, it also lost $747 million from its European operations. It’s no secret that Opel/Vauxhall has been bleeding money since 1999, or GM’s desire to restore the division — which has been essential in global product development — but it’s been kind of a mystery as to how much it would cost, or when it will happen. Well, according to one report it won’t be cheap, and the return won’t come anytime soon.
RBC Capital Markets in New York, estimates European restructuring expenses of $600 million this year and $400 million in 2013. GM Europe has also been struggling with declining market share, and may shut down a pair of manufacturing plants as a result.
Comments
They really need to end this stupidity. Opel and Vauxhall need to go the way of Pontiac and Saturn. These are businesses whose time has come and gone. Europe is a fiercely-competitive market with negative automotive growth. Car makers need to consolidate to 1-2 brands there to stay profitable.
Ok, then how do expect GM to get a 9% market share in Britain and a 6-7% market share in Europe in a “fiercely-competitive” market.
Opel is a valuable asset and must be fixed if GM expects to retain a presence in Europe. Sure Europe is experiencing negative growth right but eventually will recover. And thats not even counting the engineering and development contributions Opel can and has made.Oh and the benefits of economies of scale.
‘zaxly.
Europeans aren’t going to look favourabily upon Chevrolet; a brand that, as of late, has been positioned as a downmarket option compeating with Ssangyong, Proton, and Chinesse photocopier brands.
They know of Opel/Vaux, and with what they offer, even if Opel/Vaux is in the red, will still be better than what Chevy would sell.
GM needs to make up its mind and get rid of one of the European brands once and for all. The same way it got rid of the Pontiac brand from the US and the Daewoo brand from South Korea. People will huff and puff, but they will get over it. Reintroduce Opel to the UK and be done with it. The only Vauxhall still built in the UK is the Astra. They can still build them there (for whatever reason they do now, I suppose) if even to keep the British government happy.
Why?
Every Vauxhall is essentially a rebadged Opel. And the costs of switching badges are so minimal that they are insignigicant. Its like Kia selling the optima here and the K5 elsewhere. Its the same car with a different name. Same with Opel and Vauxhall. I dont see anything wrong with the current setup and only see loss in changing it?
Let’s break this down to make it easy.
Why is GM Europe losing money? Yea I know this is a DA question. haha :).
Is it the offering? Or is it the cost of manufacturing? Or both?
The article says it may cost 1 Billion to fix it but how? Where is this money going?
According to Wikipedia Adam Opel AG has Manufacturing facilities in 6 countries.
Vauxhall Motors is only the United Kingdom.
The main thing I need to know is how / why they are losing so much money. Thanks
The thing is Chevrolet is cannibalizing Opel , but Chevrolet (former Deawoo) dealers give such a bad service people don’t want to buy a other GM car again. Thats is what I get from forum (Dutch Cruze Forum). We have Cruze member who gone sell his Cruze after one Year because of the bad experiences with the dealership and Chevrolet costumer service and he is gone buy a Peugeot 508. (B.t.w. he only get half the price (10000€) for his one Year old Cruze of what he payed a Year ago for his new Cruze (20000€). GM is digging his own grave to many badge change and to many brands…Better have one brand who has a very good dealership and after sales service than two brands who have bad service.
If that is true that is very sad. jd what do you know about this ? Thanks
Look guys its not that simple, but what GM need to do is to keep Opel, look for efficient ways to make better products at Opel plants throughout Europe and drop the Vauxhall name completely. The positive is that the Opel platforms are use as a base for development of other GM brands such as Buick and even Chevy. So just upgrade the plants or down size which is more efficient and keep bringing those fresh new products which will trickle throuhout the GM line and the rewards will come soon enough. Look at the new Astra, that is definitely positive.
I asked the same question of Richard, why drop Vauxhall.
I think theres a bit of confusion about vauxhall. Its relationship with Opel is not like the relationship of Pontiac, Saturn, and Chevy. It is not really a different brand. It is the exact same thing as Opel but they just change the name to Vauxhall whenever an Opel is sold in the UK. Im against different cars for different regions but I dont see anything wrong with same car but different names for different regions. After all names are just that, names. Dropping Vauxhall would result in a short term loss in sales as UK buyers would be hearing a brand they never heard of while the long term gain is insignificant at best and probably nonexistent.
And Britts have definitely heard of Opel. Problem is, Vauxhall, like Holden, is deeply engrained in the UK culture. Although one could argue that dropping it and moving to Opel would be beneficial as Opel vehicles may be seen as “German-engineered”, and thus of higher quality.
By saying “they have not heard of” I meant that it is culturally engrained in British society like Vauxhall is. Yes, like Holden. I have never lived in Europe for an extended amount of time so I dont presume to know what Europeans think of their brands, but I am under the immpression that Opel is not seen as a high-quality superior brand in Europe or the UK, or at least compared to brands like Peguot or Renault. And if their cars arent high quality then the percieved higher quality image will not last long. If they are high quality, then Vauxhall will eventually be percieved as high quality.
@Babersher I live in Europe and Yes Europeans don’t see Opel as higher quality cars they have the same level of , Renault and Peugeot brands.
And the Opel dealers service is just as bad as the Chevrolets dealers , some dealers sell the two brands in the same showroom….
Gm is trying to believe us they are high quality but the truth is they aren’t ,
Now they sell some of the Opel’s even cheaper than some of the the Chevrolet’s the Chevrolet Orlando cost 18499€ (basic) the Opel Zafira 17299€ (basic).