As Hurricane Issac storms the southern region of the United States, General Motors is currently weathering a financial storm in Europe with regards to Adam Opel AG and its twin British brand Vauxhall. Perhaps the storm has been going for too long, according to financial analysts.
According to Reuters, Morgan Stanley analyst Adam Jonas stated in a research note that dumping Opel would be the best thing for the Detroit automaker. However, such a move would require some serious overhead, with an estimated $7-$13 billion upfront going towards restructuring, an equity contribution to a buyer and funding Opel’s pension obligations.
“One of the worst things in the auto industry is owning a cash-burning, resource-consuming business,” wrote Jonas, who has an “overweight” rating on GM shares. “We believe the time has come for GM to find a new home for Opel.” However, General Motors officially stated that it remains committed to the brand.
Comments
Moron analyst… Oh wait Opel has been losing money for an entire decade… Hmmmm unfortunately maybe he is on to something. Bummer dude… My Vote completely overhaul everything, the brand identity, amount of vehicles, type of vehicles, corporate structure, design language (although I like it), manufacturing tell Euro land to go to $&@! with there regulations on manufacturing… Major changes should already have been set in place… The lack of Change is alarming to me…
exactly, get those parasitic occupants out of Rüsselsheim! Bye, bye, Government Motors!
The roof line doesn’t cut in in the two door model , but the 4 door concept is brilliant and balances the whole car . If GM is indeed keeping Opel it needs to seriously sit with pencils and erasers at hand to limit the models to one in each segment . If they feel to the bottom of their trendy jeans that they will not be market leaders with the models selected , then do the right thing and sell the company….don’t choose to be second best , ever !!
Loveopel; GM should keep Opel, but restructure and the European governments should stay out of the restructuring…
Wonder if they would sell in the US through Buick like the Old Days? Just a thought. Could compete with Fiat.
Remember Saturn? The majority of the new models they had before they close down were Re-badged Opels remember the Saturn Astra? All they did was take out the Opel badge and put a couple trim pieces on And called it a Saturn. Remember the Saturn Aura? next-generation Saturn Aura Was the Opel insignia and now that Opal is a Buick Regal. And the last generation Saturn Vue? it was a Opel Antara. So yes GM has tried to bring Opal back in a different form as the new improved Saturn brand before they got axed. Bringing Opel to the states? That is something that I can’t see GM doing..they tried and sadly failed.
Maybe rebadging is what killed them. Bring’em over as imported Opels.
Archangel, ru sure the Opel rebadged did in Saturn or just bad marketing and bad choices. The Astra was a disappointment and underpowered but the Ion was much more of a disappointment. Importing the Astra was a very bad idea, it was overpriced for what it was and underpowered. These are bad decisions by old GM not at all the fault of the vehicle. The Astra in and of itself was a great looking hatchback and a relatively good vehicle, it should however never been imported from Belgium… The Ion was made in the states and people recognized the whole “Saturn” Tennessee we can build smsll cars in the US connection… But the Ion was poorly designed and Saturn began to loose it’s customer base. Then came the Aura and new Vue both great vehicles. Saturn was killed off because GM had to downsize its brands not because it had bad cars, the marketing and PD teams made Careless and bad decisions. Anyway…
All I’m saying is that before gm killed Saturn they started bringing rebadged opel’s as saturns, I owned a Saturn vue 2005 it was a great little suv so I’m not discounting saturn at all. I think the move to Opel cars and suv’s was an good idea but it was a little to late and gm killed Saturn. Saturn had an image problem and these new european cars were supposed to inject new blood to saturn with “premuim” cars the cheapest fix was to import existing cars from europe. In the hopes to remake saturn but it was too late. The US has had a little taste of Opel cars the current Buick regal is a great car and the last gen Saturn vue and the Astra also opel products I think gm won’t try to bring back Opel as a brand again we may see future rebadged products make it into the US if they survive this round. Your right gm messed up with Saturn im not saying Opel cars are bad I’m just saying gm won’t bring Opel back to the US because in a way they tried to..and gm failed them.
Archangel, ok… Ya it is too bad the way things went down. As for Opel they need allot of help, and Iam not sure rebadging cars is the answere but unfortunately branding Opels in new markets and creating dealership networks is expensive. I don’t think GM is fired up about investing more money in new markets, that is quite a risk. Importing Opels here as Opels could be expensive for the consumer, the perceived value may not be there for the US consumer meaning the mark up. But I would like to see Opels here as Opels, but what dealerships sell them, how do you get around the overlap…
There will be a large use of models designed by Opel around the world more so than in the past with the Saturn efforts remember we will get down to a smaller number of basic chassis designs with more variations of each chassis, that being said Opel will be key in designing small and midsize cars with premium feel and driving abilities. Opel does have alot of new product that will just about fit perfectly into buicks portfolio and this will continue to happen even more often than in the recent past just think Cascada…..as Riv…. not a bad thought is it?
It Opel reaped the rewards of designing Buick’s line up and got a kick back from the Buick profits because of their contribution they wouldn’t be doing so poorly on paper. Considering the sales Buick has they are almost getting a free ride in terms of R&D for their line up that overlaps with Opel.
JD, I have to agree with Andrew here, what reward is Opel getting for developing Buicks…
Just a thought here:
1. Take Opel design team, ship them over to Vauxhall, and let them continue doing there own thing for GM
2. Turn Opel into a semi-independent employee-owned company. (GM still owns say 51%) Let them hire there own design team, there own marketing team, there own management system, etc…, etc… Hopefully that should quell the auto unions
3. If (probably when) New Opel fails, either schickhand them or reincorporate into GM and say something like “We tried it your way, it didn’t work. So shut up and do your job.” But in a nice way…
If New Opel somehow succeeds, then great. GM has a new product line and everyone associated with Opel should be happy.
4. Profit 😉
Just a quick idea. Probably too simply to work and too costly to implement. But its something to think about…
…Or all of this is just some incoherent rambling from a sleep-deprived individual…
The US market is saturated with enough brands. There in nothing for GM to gain by bringing Opels into the US – it would only cannibalize Buick sales and possibly even some entry level Cadillacs.
And besides, GM already has enough overlap in its lineup given its market share to justify yet another vehicle in the showroom or another brand to market. Opel won’t exactly sell itself on name alone. Better to invest its marketing dollars on established brands or throw the money directly into vehicle content.
Let’s face it – even in Europe, Opel hasn’t been able to sustain themselves profitably when the economy was favorable. How does anyone think they stand a chance given Europe’s current financial state of crisis?
One assembly plant running three shifts could support the total volume of GM vehicles being sold in Europe. GM is WAY over-capacity in Europe. There is no way exporting Opels to markets that don’t already sell them is going to change the situation.
The only answer is to chop GM overhead in Europe by drastic amounts.
from the midsized up, yes it would affect Buick sales because of the commonality of the Regal and the Insignia, but for the Adam, Corsa and Astra I would have to disagree. If those 3 cars were brought on as say Vauxhalls in the U.S./ Canada, I think they would do quite well, because GM has no offerings for the hot hatch segment of the market, for at least the subcompact car segment with the cruze-for now-which is why the Focus is doing as well as it is. Also lets not forget that Opel has a vehicle to compete with the Fiat 500, that being the Adam. If Opel were to be brought to North America, GM would get a better lead on the European import market against Fiat and be able to compete with Volkwagen. Another important thing to remember is that, Gm has the ability to advertise various different marques, look at Pontiac and Saturn for example, not the greatest brands in there final days, to say the least, but it shows that GM can do it, and they will be in a better position if they were to do this because it would create 2 different design schools within GM, the Sonic, and the Cruze for Chevy, and the Adam, Corsa and Astra for Vauxhall, both selling to a youthful Y generation buying market. With Opel I would like to see them sell the Verano, the Insignia and another full sized car for the entry level rather then that horrid lacrosse, (not a bad looking car, but that front-end, needs a proverbial bag over its head), and sell all the Opel SUVs, I would love to see Opel as a RWD luxury car company, but that isn’t going to happen any time soon.
When it comes to the business at hand, Opel hasn’t made any good vehicles in a long while, but they have shown some improvement with there new vehicles, the Astra has been doing very well before the Euro meltdown, for vehicle sales, I’d just say bad timing had alot to do with this, and the corporate sturcture at large has a major part in there negative profitability. I think that Opel can be fixed, but they really need to expand there horizon for other markets.
The way I see it, introduce the Adam, Corsa and Astra to NA, as Vauxhall, replace Buick with Opel, cause lets face it, it’s going that way anyways more or less, and fix the corporate structure.
Opel should have full access to at least one big growing market, what does not mean exporting from Europe but producing locally in a GM factory.
But GM’s behaviour is very paradoxic concerning that. For example, Opel sold cars in India until 2009. Then GM banned Opel to sell there and offered every Opel-owner to exchange their old Opel for a new Chevrolet. This is something I can’t understand!? How can Opel be profitable if they only sell in Europe?
Opel I is a cash cow for GM and GM knows that.
The opel employes would be happy to get seperated form the evil stepmother GM if that would mean with all consequences:
– No more paying GM 2,500 € per sold car just for using the Opel and GM batch on their Parts.
– No more developing Chevys and Buicks that are build and sold in the hole world. The largest portion of the GM worldwide sales.
– No more technicaly “adviced by US” development that makes their cars unnecessary heavy and technicaly more or less out-of-date on a european standart.
– …
Maybe Opel can not survive if they don’t find a new Partner, but GM would defently go belly up if you pull out Opel.
PS: I don’t know where Morgan Stanley gets its numbers from but there is no pension fund that GM would take care about. The Opel pension model is not part of the company. It looks like Morgan Stanley is trying to catch some deeply needed new business. Last week there where some reports about an army of top traders that are fleeing from the company. Threre were rumors about a “Lehman Brothers 2.0” .
Opel is a cash cow for GM? Wait… Give me a minute to regain my composure…
By what measure? The hordes of investors standing in line to buy it? Why would billions have to be put on the table? Why would it have been considered at all to part with it during bankruptcy? If Opel is a cash cow now, then it must have been busting at the seams with profits five years ago. Pure fantasy.
There is some talent at Opel, but GM can’t afford top of the market wages for bottom of the market sales performance. Opel has been subsidized far too long and keeping Opel going through Europe’s economic downturn is going to be even more expensive than it has been already.
GM’s stock price indicates that there is more fall out required in the survival of the fittest, so anyone working at Opel had better be proving themselves. As assembly plant, as designer, as engineer, as marketer…
Saturn only perished because Opel was on the chopping block. Personally, I think Buick Buick should fully re-invent themselves by selling cars like Corsa and even the new Adam. With Buick, GM has a great chance to redefine entry level luxury as the overall market place turns to smaller cars.
If this not be possible, maybe Chevy should sell the small Opels much like they did GEO in the 80s.
As for Europe, GM would be best off gutting Opel to the point where the brand only sold ADAM, CORSA, the ASTRA line and a few MVP/SUV style vehicles. This would give GM a chance to close a majority of factories while still making money off their top selling volume vehicles. OPEL is a damaged brand which only improved recently and no one can blame a German for not wanting to spend a lot of money for an Insignia–GREAT car, no buyers aside from fleet. Then again, Andrew makes a great point that Buick owes Opel a lot of money which just might put the brand in the black. Maybe there should be a OVB global division?