According to a report from Reuters, French automaker PSA Group has reached a deal to purchase General Motors’ loss-making Opel division.
Citing “sources with knowledge of the matter”, the publication states that board of PSA Group, which makes the Peugeot, Citroen, and DS Automobiles brands, approved the deal on Friday, and that an official announcement was planned for Monday. Spokespeople for PSA and Opel declined to comment on the matter.
On February 14, Paris-based PSA Group, which runs the Peugeot, Citroen and DS marques, confirmed that it was negotiating the purchase of GM’s European Opel business, which includes Vauxhall. The confirmation of negotiations sparked concern over job cuts in France, Germany, the United Kingdom and Spain. The deal would create the second-largest carmaker by sales volume in Europe behind Volkswagen. As part of an alliance formed in 2012, the two carmakers already share some production in Europe.
Opel leadership postponed a town hall meeting scheduled for Friday until Monday morning, stating that they were not at liberty to discuss details of the rumored deal.
PSA chief executive Carlos Tavares believes that a complete buyout of Opel furnishes his firm with a chance to “create a European car champion” that would exceed 5 million annual vehicle sales. As part of the acquisition, PSA would overhaul the Opel vehicle line with its own platforms, powertrain, and technologies in an effort to facilitate rapid savings, which sources have stated to be in the range of 2 billion euros ($2.1 billion USD).
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Goodbye Opel and Vauxhall. You had a good run. And Peugeot – get over to the USA!
So GMA Writers and Staff: aren’t you going to feel kinda weird cutting this entire part of your site away?
Don’t panic Alex is going to start PSA Authority on Monday! lol
If only I could be so lucky! 🙂
Reuters obviously has some inside sources at PSA.
Reuters was well informed about the deal with GM in 2012, about the entry of Dongfeng and the French Republic in the capital of PSA.
Reuters broke the news about this PSA approach to acquire Opel, which was confirmed by PSA on February 14, and then also by GM.
So when Reuters reports this, it does very probably correspond with the facts.
BTW, I deem it strange to call the workers assembly (Betriebsversammlung) a “town hall meeting”. Not the whole town of RĂĽsselsheim is invited, but all and only the workers at Opel RĂĽsselsheim, from the factory floor, the engineering and design workshops, and the administration.
Big question is, what assets are actually being sold.
GM’s 100% share of the Adam Opel AG? Or the Adam Opel AG’s assets? Which subsidiary and sister companies are going with that? The Adam Opel AG is not necessarily the 100% owner of the GM/Opel factories in Europe, just as the Opel Group GmbH, which leads all of GM’s operations in Europe, including Russia, is not owner of the Adam Opel AG.
What are the deals about the continued (or discontinued) production of Buick and Holden cars in Gliwice and RĂĽsselsheim?
Which markets are embargoed for which company with which products and for how many years and months?
So many open questions…
…. and hopefully we will get at least some answers on Monday. One thing is for sure – we have had Old GM, we have had New GM and now we have got Little GM!
Townhall meeting is an internal GM corportate term used frequently to denote an open, no-invite meeting.
Can’t wait to find out the answers to those very same questions on Monday.
I read of a “Betriebsversammlung”, and that is certainly not an “open, no-invite meeting”.
The legal basis of this assemlby is the “Betriebsverfassungsgesetz” (official abbreviation “BetrVG”), of which an english translation (for the benefit of US and British owners of companies in Germany) is made available as “Works Constitution Act” on the Web at the governments law and orders repository: http://www.gesetze-im-internet.de/englisch_betrvg/englisch_betrvg.html
The “Betriebsversammlung” — translated as “Works meeting” is regulated in Division Four, sections 42 to 46, where the first sentence of section 42 stipulates: ” The works meeting shall be composed of all the employees of the establishment; it shall be conducted by the chairman of the works council. It shall not be public. ”
Section 43 begins “The works council shall call a works meeting once in every calendar quarter and report on its activities. ” and later “The employer shall be invited to the works meetings and department meetings and notified of the agenda. He shall be entitled to address the meetings.”
part 2 of this section ” At least once in every calendar year the employer or his representative shall make a report to the works meeting on staff questions including the status of equality between women and men and the integration of the foreign employees working in the establishment, the financial position of and trends in the establishment, and on environmental protection in the establishment as far as there is no risk of a disclosure of trade or business secrets.”
In section 46 “Delegates from the trade unions represented in the establishment shall be entitled to attend all works and department meetings in an advisory capacity. ”
So all that makes quite clear for my reading that this is not “an open, no-invite meeting”.
Now, in my understanding, the employer has the right to call meetings of the employees on his own initiative, led by the employer, and not by the Works Council president. But, as I said, the German press spoke of a “Betriebsversammlung”, and the adjournment of it being announced by the president of the works council. K.T. Neumann as representative of the employer was mentioned as being present.
The Betriebsversammlung (workers assembly) at Opel in RĂĽsselsheim took place today, but was interrupted after one hour and adjourned until Monday morning 09:45 in Hall K48, an old production hall wich has room for thousands of people.
Chairperson of the factory council (for Rüsselsheim and all German plants), Dr. Wolfgang Schäfer-Klug ended the assembly today by saying that he could not say much about the ongoing negociations. KTN was also present.
Details from this report in the German business weekly “Wirtschaftswoche”.
See the location of hall K48 in the center of this view of Open Street Map:
http://www.openstreetmap.org/#map=16/49.9893/8.3850
Can anyone tell me if GM sells their european division opel/vauxhall what are they gonna make in europe? I thought this corporation is worldwide… I wonder if GM wants to commit suicide. If they at least brought back Pontiac and Oldsmobile… I just dont understand it, in 2015 they withdrawn Chevrolet from Europe to focus on Opel/Vauxhall once again and now they are selling it…. I say this for years car industry is going straight to hell.
Trevor – I fully understand what you’re saying. At the moment we still don’t know if GM are going to have a stake in this new structure (I admit it looks unlikely) and what would also be interesting to find out is when the talks with PSA started (my bet would be Dec 2016 or Jan 2017) and also who initiated the talks ( and my bet would be GM). If I’m right then Trevor you’re question is poignant, just as GM burnt all their bridges for any hope in hell of ever selling a Chevrolet badged car in Europe again and just as Vauxhall / Opel were about to least break even they throw in the towel. I know they will get $1bn or whatever the figure ends up being but to GM it’s not going make or break the bank. And nobody has yet found out anything as regards Holden, presumably they will end up with a range of rebadged Chaewoos from Korea.
thats is stuped story opel puches out chevrolet eu market. opel not only car in europe and opel. and gm gonsern have not only one brand. Business is not easy. opel-vw-ford-chevrolet-peugeot-renault and so on. opel and chevy is different like opel or ford or vw. VAG gonsern on eu market VW-seat-skoda-audi—– and so on one maket. wtf people talk. thats only gm strategy and idea that only one car is eu market and thats opel. like inside gm figt its own brands, this brand must be strong and better ant thats must be bad and not so strong and so on.
VAg gonsern hav all brands verry strongs. VAg gonsern buy seat and skoda and made they verry strong and qualty short time and tehy have one of best market league.
and one nice example is VOLVO when doing busines rightly or wrongly. today is volvo top level easly
Volvo is a non-event in Europe, and everywhere else for that matter. It is almost as difficult to understand why Geely purchased Volvo as it is to decipher your messages.
When opc writes “gonsern” he must have meant “concern”, like “trust”.
How goes brand SAAB. SAAB was to strong inside gm and out to and they must kill him becauce something else brand must be stronger than other.
funny things but life is learn
SAAB was too strong inside GM???!!!! opc do you know how many moons this planet has?
When you look at the sentences structure “to inside gm” and “out to”, then the second “to” was actually meant as “too”, and then the whole as “brand Saab was strong inside GM and outside too”, or “both inside and outside”
It is quite obvious that English is not opc’s first language, and he does not master it very well. One has to apply some intelligent analysis to understand opc’s writings.
Well I will welcome the details on Monday to decide if this is a good deal or not.
But I would caution any over the top panic till we hear from GM also on future plans. This was not some quick short cut half thought out plan so I am expecting in the next couple weeks for GM to lay out their plans for the future globally less these money losing divisions to capitalize on the increase in stock value.
GM will benefit by this immediately but long term will be determined by their plans for the fugue.
The one thing we do know is GM has survived well even with a major money hemorrhage in Europe do surviving with out the hemorrhage of money in Europe should only instill greater profits.
Here is the long and short of it. If GM will be a much stronger company less Europe than under the present circumstances. Then if they can find a way to re enter the Euro market then they may have a chance to strengthening their place.
GM can only improve with no Opel loss of money and avoid Europe all together. But if they can find a way to re enter the market they can not only work to strengthening their profits and not spend the time trying to find a way just not to lose money.
Selling Opel is like unloading a high paid player with really bad knees in the NBA to a lesser team so they can waive him and only asking in return for a low draft pick.
Hi Scott,
I really cannot agree with “If GM will be a much stronger company less Europe”… Indeed, they will have shred off a money-losing division. But keep in mind that under IFRS accountancy rules, Opel was not loss-making any more; it only lost money under US GAAP accountancy rules. Plus – and this is crucial – GM ends up dropping from 3rd place to 6th place (if not lower) from a size perspective. We are talking FCA size here on a global perspective. Meaning the procurement discounts they would get from suppliers will also drop to reflect the size they play in now.
Add to that the engineering costs which will raise (as Holden en Buick cannot count on Opel engineering any more and the cost of engineering these cars will have to be spread over fewer cars, as Opel will take over PSA technology if we can believe the press), plus the fact that European Cadillac owners will be a victim of this deal (as most dealers are linked to Opel and this will be gone). So after giving Chevy a bad name in Europe by first selling Korean below-quality cars, and then leaving the market, now also the Cadillac name will be hurt by leaving customers without any decent servicing in the EU. It would take maybe 20 years to build up a presence with Chevy and Cadillac again, and I’m sure the losses incurred in the first years of trying to launch Chevy again, would have GM leave Europe for once and for all…
So what I see in this deal is this:
1) PSA will benefit of all the efforts done by GM in the past, up to a profitable Opel today (the French press has already announced that just changing the accountancy rules would make Opel very profitable),
2) PSA will then compete with GM in the markets which are crucial to PSA (keep in mind the non-compete clauses as requested by GM do not include the US, at least as far as the press has shared with us), thus hurting GM with its own products,
3) GM will drop to an FCA size – putting Marchionne in a position where FCA can actually acquire GM (his biggest dream), or at least force them into a merger (his second biggest dream),
4) GM will stop being a global company, thus increasing its dependency on China to be profitable in case of economic woes (not very interesting for shareholders as China does not allow money to flow back to the US).
5) GM will still carry the burden of the underfunded European pension plans, meaning US and Chinese workers will basically work for former European GM employees without any return to GM or them.
So to me, the real winners are PSA and the Chinese government; the real losers are the European GM customers (who have remained loyal to GM, also in difficult times), the GM shareholders (because shareholder value – even if it will increase in the short term – will be hurt in the longer run by less hard-core money generating global business), the Chinese and US GM workforce (who will be paying for the European pension plans) and Buick customers who will get less “white space” offerings and more “badge-engineered Chevy” to chose from. And we know what badge-engineering did with Pontiac and Oldsmobile…
So based on this analysis, I conclude that 1 to 2 billion dollars is not in line with the damage this whole deal causes to GM.
Some press have compared Mrs Barra to Alfred P. Sloan (the man who made GM the biggest corporation in the world); I think Mr. Sloan would rather have bought PSA to make GM bigger and better instead of cutting GM in bits and pieces and selling off know-how and technology, Because size does matter in this business…
Mike here is the deal.
GM was not getting any benefit from Opel and was suffering over capacity as they could not cut deals with the unions. The Euro governing body was not much help to GM in any way as they are outsiders in the market even with the old Opel name.
#1 PSA will gain some benefit because the Germans and French will give them breaks GM never would have gotten. Also the Unions will need to make new deals and I am sure there will be some cuts there.
#2 PSA will never amount to much here in the states. Fiat and Alfa were more sucessful in America than any French car and they are still struggling. Renault, Citroen and Peugeot were crap then and are crap now. They will never amount to much here as they can not compete in price cheap enough for people to risk them.
#3 Sergio and FCA will never merge. FCA is on the verge of colapse with high over capacity that even their modest profits can not fix. Also they suffer from a massive lack of volume as the Alfa plan is failing big time. They were to have sold 150K cars in N America by next year well they are only at 500 cars so far this year.
#4 GM is still a global company and the truth is Europe does not really matter as much as some want you to believe. The truth is N America and China are the keys to strength the rest is just add on sales. Europe volume really were small and not a driving force to profits.
#5 Lets just see how Monday plays out.
As for the future let just see what GM’s plans are. This was not a move of desperation as it was a move to become more efficient. Efficiency and profitability is the key to the future as just being big and moving cars is no key to success.
The truth is the future of auto sales and building is in for a major change as it can no continue as it is. The cost of cars can not continue to climb and people can not keep paying more and more. Technology is going to drive prices and in the end sales will slow down so making the most on cars people can afford will be important as will alternatives like the ride sharing and other ideas that will come.
GM had owned a good part of PSA and that did little to the bottom line. Just being bigger is not better.
The key to the future is controlling cost, Keeping products affordable. Keeping ATP per model up. Being efficient in all areas. Continued investment into future technology. Continue to make a profit. Controlling Capacity.
I do see more limited partnerships in the future with brands that are more stable and have money to spend on development. The deal like the Transmission with Ford are great as GM does most of the work but Ford pays a majority of the cost. It was not by chance Ford Prototypes were testing at GM proving grounds.
The only real value France has in the auto field is Nissan and they are not exactly setting the world on fire either.
At least in Germany, and in my perception, most those who see themselves as “loyal customers”, are loyal to Opel, which they perceive as a German brand and German company which is hampered by the “foreign influence” of GM. This perception is nutured by the loyal press, loyal i.e. to the German state.
I remember the outrage voiced by one of the widely read daylies, about a US flag hoisted in Gliwice on occasion of the opening of the GM/Opel factory there. They thought that on the occasion of the opening of the factory of Opel as a German company, the German flag should be raised, not the US American. Simply ignoring that Opel is a 100% subsidiary of GM since 1929.
It is this perception which Tavares wants to acquire for PSA.
The aura of the product overshadows the products quality und usefulness itself, and becomes more important.
Please explain the difference between IFRS and GAAP?
You present solid arguments against sale.
Hi Steve, you can find many articles explaining the differences on the net.
But basically the 3 main differences are in the intangibles, the way inventory is accounted for, and the write-offs. Under IFRS, if inventory is written down, the write down can be reversed in future periods if specific criteria are met, which is not possible under USGAAP.
It would take me a lot of space to explain how this would affect Opel’s balance sheet, but fact is that GM reports globally under US GAAP. In the European press some articles have appeared stating that just by changing the accounting standards to IFRS (which is the standard PSA uses), it would automatically put Opel in the black ink.
Mike the problem is it is even more involved than just writing it off.
The Euro market is stagnate and growth is difficult even for those who need no write offs.
Then you see the only place for growth is China as that is why everyone is putting up with their rules.
Finally share holders and the market is much more reactionary to numbers and right now Opel numbers and lack of clear path forward with Euro economic ties have subdued GM market value.
GM is in pretty good shape compared to most automakers but their stock pricing has been of concern. It is all tied back to Opel and to Shead them will strengthen ther value long term.
Just look at the short term gains already.
Auto stocks are tough today to find gains in. The market has resisted even strong companies like Ford. If GM does not gain on their stock price they will be at risk in the future even if sales are doing fine and profit being up.
You can not write that off. This is big picture.
scott3 – agreed that we will have to wait until Monday for full details, I think we have all come in at the last minute on this deal, I believe something this big has been negotiated over months not just a couple of weeks.
As regards the benefits to GM I am not sure with all the enthusiasm for consolidation as being the only way to grow that this will be a benefit in the long run. I agree about being a drain on profits but then GM is losing money in Australia and Latin America so using your metric that would mean GM just becomes a North American auto maker. Unless there are other issues we don’t know yet, an example is the underfunding of the GM Europe pension fund by $9bn, where did that come from? It has to my knowledge never been mentioned before.
Like what has been said by other news articles, this is a far different company than pre-bankruptcy, success doesnt have to be how big ur company is..
You’re right one doesn’t necessarily equal the other but in the auto industry critical mass and economies of scale are a key to success and GM is currently going in the opposite direction to every other auto maker. I haven’t checked but I think GM will now rank at about number 7 in the big league and if this a complete clean break with Europe then GM no longer qualifies as a global car manufacturer. Remember this was once the Worlds largest corporation, not just cars, period.
PSA citroen ds7. it is not easy to survive in the European car market. it is not enough for building the car and having four wheels
opc you are right, Reliant built the Robin 3 wheeler and they went bust so you definitely need 4 wheels.
The handwriting has been on the wall for awhile and all you need to do is look at the clues like Buick importing the Envision from China, Buick selling over 4X as many cars in China as in the United States and Buick’s Avista concept car which all says that General Motors no longer needed Opel (which has been bleeding money and apparently run out of ideas); General Motors will rely on GM of China for some advance concept work given that more cars are sold in China than the United States.
Come Monday I may lose interest in Gm…lots of headscatchers for me lately, but this takes the cake! Sucks massively
PSA and GM have reportedly called for a press conference at the PSA seat in Paris on Monday morning 09:15 CET, to announce the outcome of their negociations.
The continuation of the Friday plant assembly at Opel RĂĽsselsheim is scheduled for half an hour later, 09:45 CET.
CET is UTC+1, six hours in advance to New York.
It is said that this press conference is broadcasted live over the Web from here:
https://www.groupe-psa.com
Maybe I’m missing something but why can’t GM expand upon Chevrolet Europe to replace Opel? On the high-end (which Opel isn’t) isn’t Cadillac Europe somewhat well established?
Opel is a dog for GM for the many reasons people have commented on. Nobody can accuse GM of not trying.
The whole point appears to be for GM to be a global brand. Yet, models like the Buick Casada spinning off from Opel aren’t hits in North America. And there’s no value added I can see in re-branding a North American model by slapping an Opel emblem on them for European consumption.
Opel is far from a dog. The brand sells some great models like Astra and Insignia. Opel, unfortunately, has been slow to produce SUVs, and it’s still a damaged brand competing against “real” European brands with home field advantage.
GM needed a value oriented hyper brand–Chevrolet, Opel, Vauxhall and Holden should have shared development costs and presented a global line. GM Europe should have closed at least one additional factory, too.
I wonder if it will be Opel or Buick that keeps the eagle eye front facada design scheme? Will Mark Adams join PSA or go to Buick?
A failure showed like a success, this is the “New GM”. I lost the interest for GM and become a GM and PSA’s hater! And when the next bailout if the us government wants to be!
Alfred Sloan would be disappointed…
Yeah and William Durant as well.
I’m going to wait and see what Monday brings. Not a fan of French cars in general but if they leave Opel as a German company it might work out okay.
Maybe GM will now buy BMW and rebadge them as Cadillacs for the USA!!!
I would not wager on the BMW buy but the money GM will have will make them one of the most profitable and financially secure auto MFG out there in a very unsecured and troubles market.
Many companies try to diverse or grow larger to offset the debts coming in. Few are successful. The ones that tend to improve their product and financial status often return to the core and get it right then grow the business with the market.
Goodyear tire did this as they were a very large but no really profitable business. They sold off much to cut off a take over as they have had sagging stocks and returned to their core. Today they are one one of the most profitable tire companies and one of the few who have come back from complete take over.
FIrst off the Sloan thinking died a long time ago and not shrinking the number of models and divisions drove GM to Chapter 11 already. Durant also tried to buy up a bunch of companies and then failed.
What they did here is cast off a division that was losing money and not in a strong market to where recovery was easy. The financial condition of Opel was like a gangrene finger. The finger was infected and starting to hurt the healthy part of the hand and other fingers. Opel also was the pinky finger so it was just the small and far from the important finger. So they lost the finger to save the hand.
Watch as now stock prices will continue to rise for GM and will make it difficult to let anyone make a buy out attempt against their will. As it was even with other parts of GM doing well the stock was way under values for what it was and much of it has to due with money losses in Europe.
Now the money they have can be invested many ways and used to improve the company and its technology.
Another capitalistic dream might be a merger of BMW with PSA.
Besides the iconic retro Mini, and the BMW 1 series, there is little overlap between the two companies lineup. BMW does no commercial vehicles at all, and PSA (even with Opel) is not present in the higher vehicle segments.
But would such a union stand?
The egos of owners and directors are against that.
The bottom line with BMW is they do not want to merge with anyone and will fight it to the end as they have already clearly indicated.
The problems at BMW are not the lack of money but the higher cost of development. That being the case this permits them to continue what they are doing now with limited partnerships not unlike the one GM and Ford had on the Transmissions or with Honda on the Fuel Cells.
As you would note BMW already has done some sharing with Toyota already and most in the industry see that continuing as well as BMW working with other brands on other projects.
BMW cold partner with GM on a project but do not look for BMW to sell out to anyone in the near future.
Honda is also in the same boat as they are financially good but the size of their company can not keep up with development cost alone.
As of now the only companies that can really go it alone as pointed out by industrial watchers are VW, GM, Ford, Toyota and Benz. At this point all other players will need to partner on deals to control cost. Then the players with not enough money or technology to contribute to a shared plan will have to merge with someone that can carry the load but these partners are getting more difficult to find as they do not want the extra baggage many bring along with them like FCA.
BMW also had some cooperation with PSA. In some of their smaller models (1-series, Mini) they used PSA engines.
The problem is the dominant influence of the Quandt family. The same problem with the Peugeots at PSA – they do not want to lose the decisive control. In the PSA case this had been solved by Dongfeng and the French state entering in the capital of PSA (all now with 13.68% or so. One reads always 14%, but it is a little below that).
Exactly no company that is doing well wants to lose control just to control development cost.
Development cost today are a MFG killer in the auto industry. Regulations from safety to EPA. Also the advancements of technology and more complex materials followed by excessive liabilities anymore have all contributed to the higher and higher cost to develop systems for a complete car.
Companies like GM and Ford have decided it is best to work together on the Transmission where Ford help pay for it and contributed some tech while GM did most of the work and used Fords funding to help pay for it.
BMW also paid GM to make a six speed transmission about 10 years ago and then after 2 years of exclusive use GM was permitted to use it in the CTS and other vehicles.
The drive to control cost in the industry has driven major MFG to find strange bed partners. But you can not blame them.
GM partnered with PSA to save cost and even bought into them for a while.
There are few companies anymore that can do it all. Many subcontract out systems to be developed by MFG suppliers. They buy the complete package at a specified cost like a Steering unit or HAVC system Tires and wheels in some cases sold to MFG as a package and are delivered to the plant mounted balanced and ready to install.
Automakers need to balance the prices of a car vs. the profits as if they go too cheap they make no money and if they charge too much no one will buy the car. Price wins in sales. Look at Hyundai. In the past their quality was total crap but people bought them because of a low price and a big warranty that they needed. Many dumped the cars by 70K miles as they did not want to invest in timing belts or the labor to put them in. But price made the sale.
This is why GM gets good reviews from investment groups for controlling cost today unlike the past and also getting things to the point where they are making more money per unit sold. In the past they sold a lot of cars with high cost to make them and very little profit per unit. That is the path to failure as we saw where that went.
Mary has corrected that today and will continue to make them a stronger company. Sometimes you have to take a step back to move forward. It is not a matter of if but when the market slows down with the economy that the benefits will be shown and many automakers that have large debt and over capacity problems will fail.
We have yet to see the last MFG fail.
No, “Exactly no company that is doing well wants to lose control just to control development cost” is not the problem, the problem is the private owners, in this case the Quandt family (with Susanne Klatten as one of the central figures).
The company as such has no interests. They are victims to the private owners or the management. As to the mangement’s disrespect for the companies they lead, see on the one hand the gigantic sums of money they are extorting (actually part of the company’s profit), which is more of a bribe to prevent them to steal outright, and on the other hand by the examples of the former chemical giant Hoechst AG in Germany, which was dismantled by its own CEO JĂĽrgen Dormann, or the former steel company PreuĂźag, which was converted by its management to a tourism operator.
What going to happen with Buick and Holden? The 2 of them get several of their vehicles from Opel. Can GM become a truly global company without Europe?
No it can’t and no matter what spin is put on it GM will be classified as a large provincial manufacturer.
Buick will share in the present couple models and they will just be replaced with their own. It is not like GM is unable to do their own Buick models. In fact they may even keep the rights to the platform and just build them in Oshawa like they have the Regal.
The reality is GM can operate just fine with out Opel and there is nothing they are doing now that could not be done with out them. other than lose money as they are now.
Really take a look a the size of the Euro market and it is not as large as some would thing. They have lost much of their significance.
The reason Euro brands have had to go Global as they can not survive on the home market alone. Now as for GM. If they never sold a Chevy in Europe they would still keep right on doing fine. China is the only other global market showing any growth and that is why everyone is needing to make a go there.
It is the growth of China that is important. Europe is not a growing market. The world has changed and just as we have seen the failure of the British car industry the Euro one is now on the decline accept for the brands that have an outside presents. Even then many are not in America as they can’t break in very easily. Just look at the history of any french brand here.
Europe is divided. Western Europe is a saturated market, but East Europe is not. But OTOH I don’t see much possibilities for the East to catch up with the West in short time. Eastern Europe is used as a cheap labor pool by Germany, France, etc. And the UK
This was not a sudden deal and it had been in the works for a good while.Â
I also see Europe as a very stagnate market. Just look at all the home brands and how they rely on N America and China for Survival of their brands. Growth there is slow to nothing.Â
While I see GM returning with Chevy it is not a must be for them and it will take time and careful product planning. Just look at how Honda and Toyota struggle in Europe. Chevy will only come back with the right product at the right prices to re enter the market.
Yes there is room for growth in East Europe but money is still tight and only the cheapest cars are building increases. Also note with the Euro Union and the money Britain is not the last to leave or rebel.
Also the simple fact is GM can write off the failure to make money at Opel but it does nothing to fix the low stock prices that it helps create. Stocks for Automakers are stagnate even for companies doing well like Ford. GM is as profitable as they have been for years but the news out of Opel has hurt them time and time again with the losses. Â Just look at the bounce the price took when the news leaked of the sale.Â
Opel has been a gangrene finger on a healthy hand. There is no easy or sure way to cure it so remove the finger to save the hand. Why. Stock prices. GM is at risk as long as stocks remain down. GM is in a good place to weather a tough market in all areas of cost control and profitability but they still have depressed stock  prices. Few automakers have good stock prices and most of the prices defy logic. Ford and GM should be higher and Tesla should had never been that high. There is no accounting to market whims.Â
The Automakers are looking to high tech development as a way to drive stocks as that is what Tesla is riding as most people are now playing the game with medical and high tech stocks. My Uncle has made millions doing just this. They are the new area where gains can be made in large amounts in a short time. The Risk also go up substantially too.
As for Opel their total volume they sell is not going to hurt GM. Also their contribution to GM is not going to hurt as GM is more than able to do anything they were doing in Germany at any of their other tech centers. Hell the Regal was also built here too. Only the Convertible made in Poland that sells a small number per month will be an issue here and it was time for it to go anyways as  the model is coming to an end in Europe.
China will buy about anything with Buick on it and GM has established a large design and tech center just for Buick in China to serve their market. Growth there is still on the increase.Â
This is like the Pontiac question. You have to weigh the info and not make an emotional derision. This is a thinking issue not one you make with the heart. It is the kind of decision GM avoided for decades on many other issues that lead them to Chapter 11.
The Sloan era is long gone and trying to run that play today will only get you sacked.Â
Corvette and cadillac have pontential europe but they must worke verry hard quality-tehnolgy and prices. but us cars is difficult to sell eu than sell eu cars us besause us cars is so different even today us cars what not so different like old days . And so gm is difficult coporate gm eu division what is only one brand. us just dont understand what eu peoples wants of cars, culture is so different. holden goes better i think. holden history is difficult much they cars based eu staff and cars but tottaly mixed strange us staff. holden more us culture
What i think people are afraid of is GM becoming a smaller company, when they were once a company that ruled the automotive scene for 77 years straight. But what people fail to realize, including myself, this is a far better choice for GM as we move into a slower economy. GM is far more profitable now, they can focus there ability into bring out all important product for Cadillac and other GM brands. They can always gain ground again in Europe, just in a profitable way
very sad about all this news, is crazy! in 2012 New Opel Engine plant was inaugurated in Szentgotthárd, Hungary ( €500 million flex-plant!!). Production began in late 2012 with the 1.6 sidi (LWC engine), now they produce Three different types of engines manufactured on a shared production line, plant employ 800 people and 500,000 engines produced every year. hope in the future PSA will not close this plant.
Fresh out in the French press:
GM will quit Europe altogether… So good luck to Cadillac and Corvette owners here in Europe!
And GM will pay “a substantial amount” into the European pension deficits for ex-GM retirees. So to me this translates into GM paying more into this deal than they get for all the Opel know-how and patents.
In my previous posts above I already mentioned that under IFRS accounting standards, Opel is already profitable. So this deal translates into GM paying (and not receiving) huge amounts to shed off a (just now) profitable business, dropping in size to a “middle-field” player, having to relay fully on Chinese technology for future Holden and Buick cars, and turning its back to all the Cadillac and Corvette owners in Europe (as they will have no presence any more at all in Europe). This is a nightmare scenario…
For the French article, see the link. It says in capital letters “GM QUITTE L’EUROPE” meaning “GM quits Europe”: https://investir.lesechos.fr/actions/actualites/accord-entre-psa-et-gm-sur-le-rachat-d-opel-sources-1648661.php
Eweryone wants all global market that not mean they dead
Dont be surprised if GM turned around and bought FCA now. Just saying.
What no one is not mensionig here is Holden. I think this is actually what the doctor’s ordered for Holden. With the production shut down in Australia, GM has looked more and more to Holden for design work. Latest concepts like Avista were designed AND built in Australia, as the design studio in Melbourne is one of three studios owned by GM that has the capability to do so. Other two are in Detroit and Germany. All other GMs studios around the world can only design vehicles but can’t assemble them themselves. I see an expended role for Holden in GMs portfolio going forward.
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