Is General Motors out, or in? Cheif executive officer, Mary Barra, struck an unusual note when she told reporters at the Detroit Automotive Press Association that the company she leads would “absolutely” consider returning to the European market, the Detroit Bureau reported on Monday.
Recall, GM will spend billions of dollars to finalize the Opel sale to France’s PSA Groupe. It’s the same deal that turned over every GM production and engineering faciltiy—save for one Italian powertrain operation—to the French automaker. GM failed to turn a profit in Europe for 17 years before throwing in the towel with Opel and Vauxhall.
But, Barra sounded more optimistic. “Nothing keeps us from going back,” she said. The statement came with a little asterisk, though.
She added the automaker would need “transformative products” if it considered returning to Europe. The phrase likely alludes to self-driving cars and electric vehicles. Both are under rapid development at GM.
As she mulled over Europe, she also said other markets could face GM’s guillotine, too. “We need to generate an appropriate return. If we don’t see a path to generate appropriate returns we’re going to invest where we see better opportunities,” Barra said.
GM Korea has been a sour spot on the automaker’s financial record as of recent as labor rates climb and the market becomes unfavorable for the company. GM exited Europe, Indonesia, pulled brands from Russia, India, and ended manufacturing in Australia under Barra’s watch thus far.
Comments
They’re going to make ‘special’ cars in China and then sell them worldwide.
Translation to Site Trumptards — “Mary and Trump are working on a deal to bring jobs to America and make it so great again.”
Cadillac set the “Standard of the World” in large part because employees not only built “the Standard of the World,” they set new world standards of living for unskilled, skilled and professional workers alike.
General Motors and other long in the tooth vehicle manufacturers will go the way of the typewriter. Had GM changed it’s identity during it’s bankruptcy it may would still have a chance at longer term survival.
During it’s heydays as the world’s leading edge automobile manufacturer GM was mostly product driven. Today General Motors sells “Brands” with products attached.
GM used Opel more like a sklave development platform for its US and China markets rather than acknowledge it as an equivalent development partner. 20 years of loss making and the failed korean Chevrolet entry into Europe are proof of GM’s inability to actually deliver in difficult markets.
The reality was GM was majorly damaged going into the bail out. They were given a clean sheet and have gone about remaking themselves.
The first step was to begin work on changing the culture. The second step has been to clean up the way they do business by cutting cost and expenses while increasing profitability. Now they are changing their image to tri age themselves as a tech company to drive up stock prices. You may note Ford still sits around $11-14 a share while GM has moved to $41 a share.
GM failed in Europe because at the time they thought they could just show up and they would sell. This was the arrogance of the pre bail out managment and the failure of the present in cleaning it up.
PSA is finding out how damaged Opel was now.
https://www.reuters.com/article/us-peugeot-gm-opel-exclusive/exclusive-psa-seeks-opel-refund-from-gm-over-co2-emissions-idUSKBN1DT1NA
The truth is while they had much good they faced a major issue in profitability.
GM is doing most things right now and they need to focus on product delivering what people today want and what is profitable.
Key is keeping product affordable, also it needs to be reliable and build on this image over time. It takes product and time to earn the trust while it is priced to where people will give it a try.
Let’s face it Hyundai failedand then they pulled back and came back with appealing, affordable product that over time has earned the trust of many. Their cars are not thrilling, fast or ho,d. If cult followings but they sell.
GM can return to Europe and the EV program with the many cars coming will be key. GM has a lead here and the Euro Union has a major move to focus on EV models and EV models only in some markets.
China sales will fund this whole deal and it is up to Euro labor unions to determine if the product can be built in country at a profit. This is where Eastern Europe comes into play. Even most Porsche models are built there now.
It to look at this in the small picture here like some like to do it would fall short of a full essesment. Even with what I point out there is so much more to this. Buying materials. Labor training, out dated facilities, unions working with them, regulations, the value of the Euro, etc.
This is a deal you need to truly look at what it takes to build a product there and what it takes to sell there in the future. This is big picture stuff.
Why do labor unions always need to submit? Capitalism is being destroyed by run away greed.
Porsche, as you site as an example, could easily turn a profit using German labor. It is time for nation states to protect workers, take action on the growing gap between the wealthy 1 percent and the 99 percent remainder of us.
Building luxury product in low wage Eastern Europe is greed exemplified.
Look companies are in business to make money and pay dividends. The by product of that is jobs and fair pay.
If they are not happy with the pay get another job. Many places are trying to get quality workers and people that can pass a drug test or show up everyday. God knows we have trouble finding them. I just saw a commercial for a auto repair shop advertising for techs starting at $30 an hour because there are shortages.
The reality is opportunity is out there if you want it. It is time to stop trying to make a job at Mc Donalds a career and a simple assembly line job a six figure job.
Time people learn from successful people vs expecting a Union or government to bail their butts out.
Life is not equal. The deciding factor is just how bad do you want success and are willing to work for it.
I paid my way though school and paid my dues with long hours and low pay. I did not need a Union or Goverment politician to find my way.
You see greed I see success. If you want success you need to go out and get it. Success is a reward not a right.
Scott overdosed on Fox and Friends Kool Aid!
Maybe we should outsource more jobs to low wage South East Asia because every days Americans are tardy pot heads? Maybe this would get better if we locked Americans up in Chinese-style employer owned dorms?
Your assertion that VW can’t turn a profit from premium Porche without Eastern European labor is specis and lacks any distinction between profit and greed.
You speak as if the free movement of capital and labor is an absolute corporate right. Until recently we had tariffs to protect workers. We will again return to tariffs if extreme greed leads to further economic destabilization and wage stagnation.
The strong performance of both Sanders and Trump prove that Americans are ready for change. Henry Ford realized that labor must earn enough money to purchase the products that they produce. Until we return to such common sense thinking expect more Brexits, 5 Stars, Bernies and Trumps.
Stephen it might be good if you put the pit down and showed up to work everyday.
The failure of Capitalism is the uneven sharing of wealth. The failure of socialism is the equal sharing of misery.
At least with capitalism is if you want to do what it takes opportunity is always there to improve your status in life. In Socialism unless you are a ranking party member you get the basics and little to no opportunity.
I do agree both parties are failing to provide us with what we need but as of now we still have no solution to the problems.
God knows we can’t afford Bernie because we can’t afford what we have now.
Might note there is a move by many on both sides to try to move us more to a global goverment. Once your freedom is gone then you will really pay the price.
God help us if you think Obama and McCain are theme answer.
Scott, You need to stop believing everything that Sean Hannity says. Same goes for Alex Jones.
No one is “sharing the misery” in Scandinavia, Germany or the Benelux nations. The Swiss are doing fine. Ireland is growing rich.
Each of these wealthy and successful nations have blended the best elements of both Socialism and Capitalism. These nations spread the weath when necessary while incentivising hard work. No one clings to a pit and ignores work responsibilities.
You’ve been brainwashed into a race to the bottom mentality in which workers and the sick are the problem. In your previous post you more than inferred the the average American worker was a overpaid lazy pothead incapable of even showing up on time. This is Fox News divide and conquer propoganda and you’ve fallen for it. It helps you to feel good about yourself while snarking at others.
The US could be as healthy as it’s NATO allies and once again be a land of opportunity for its workers. The cold war is over, Scott, so let go of the tired “share the misery” 1980s Rush Limbaugh cliches.
If they do proceed, it will be interesting to see which makes, models, and overall strategy they adopt.
GM has some baggage in some European countries (rebadged Daewoos).
The future of the Euro is unknown. Chevy had 8% of the market when they backed out in 2011, although (I believe) they launched the Cruze in the EU, and Russia was an opportunity (pre-sanctions).
It’s not undoable … just another challenge.
GM should re-enter Europe with Buick. This would create scale for Buick China to create small cars on par with BMW and other luxury brands therefore allowing action in the A and B space.
In much of the world Chevrolet is a tired, damaged brand. Barra needs to consider elevating Buick into a true global brand. Buick could do well in Russia, too. Buick could target the three hundred million wealthy Indians, too.
Nope it’s going to be Chevy and Cadillac that are going to dominate the car industry in Europe. Just you watch
I wouldn’t be surprised if it were Chevy and Cadillac.
Not so sure about the ‘dominating’ part, though. Near term, at least.
Chevrolet and Cadillac do not dominate the US or Chinese car industries so I think your are guilty of wishful thinking for Europe.
Opel, even with it’s current high quality and well styled line up, was below 7% market share. I just don’t see the German giving up on the pride of BMW, Benz, and VW group in favor of GM.
The UK and Ireland present great opportunity, especially if Britain joins NAFTA. A white space middle brand with it’s own market niche settled above VW but below Audi provides GM a unique market position.
Europe doesn’t need another value brand when the continent already has too many oft supported by politicians.
Europe is beginning to host too many luxury brands, too, and a resurgent and expanding Alfa, Volvo, and Masserati will be the straws breaking camel’s back. There is little room for Cadillac.
Some may have actually missed the point here. Let me repeat to make sure: GM is an absolute failure considering brand image and product management.
GM, as an American company, wasted not only a huge chance to develop a positive imaged brand;”Opel” with a basically free “Made in Germany” bonus. No, the rather arrogant idea to simply re-brand a failed Korean “Daewoo” as a “Chevrolet” was another unforgivable and naive error with fall-out. The Asian “Daewoo Matiz” wasn’t even renamed. I don’t know how much this dumb idea has cost GM over the years. In the end the Chevrolet-brand actually had to be completely ( bar Corvette) removed from the market. A complete and utter failure. Again: They just don’t understand brand image and the nonnegotiable value to customer identification i.e. the final product.
In the end the Asian Chevrolet had a negative effect on Opel as well. The forced repeated re-use of the Opel dealers hurt the Opel brand multiple times over and over again. They had to work with competitor Fiat, which was canceled and Chevrolet, which was canceled all of which made Opel, as a brand, look bad.
in the Mid 90’s GM killed Opel’s high-quality image by mindless and reckless cost-cutting. Opel lost continuously market-share and its Image never really recovered from this GM-error. In 2005 a FIAT -partnership started which, surprise, upheld only five years until about 2010 it was canceled. In 2009 GM actually intended to sell Opel, causing serious havoc for the Brand image. Especially the sudden cancellation of the sale left loyal customers suspicious and uncertain. Sales plummeted. Opel crawled once again out of this GM-dug grave. By 2013 things were getting better again. Then 2017. Again another sale; now to PSA. Also this as a repeated negative effect on sales. It also identified a core problem: GM did not prepare in any solid way for the European Cafe-standard which would have cost GM further billions from 2021 onwards. A quick sale to PSA saved them. Anyway…
We may hope for a better future for Opel with a more respectful and dedicated parent. It cannot get any worse than with GM. That is absolutely sure.
If the mishandling of Chevy in Europe lead to the demise of Opel then I say it was well worth it! It has lead to a current day of not having to worry about keeping float a non profit division of GM!
So thank you to the people of Europe who played along, now that boat anchor belongs to psa a French company and I hope it continues to fail misably.
GM will come back to the Europe market and be better then ever. I know your thinking this guy is crazy but you watch it will happen!
You know I find it funny that the people of Europe take pride in buying cars built in Europe while not wanting to buy other cars from around the world but have zero problems asking people around the world to buy their junk. Do you realize how worthless your car companies would be if us Americans never purchased your crap over Here?
@ Brian
I do not judge people I don’t know. Please don’t take my dry facts-summary, personal.
I hope Chevrolet will be successful, but I guess it rather than on hope it probably depends on the image that GM Chevrolet plans to radiate. A relative cheap Korean “left-over” rebranded wasn’t really going to make it in an established market with a high number of national high-quality manufacturers. such a strategy is not earning trust needed for an expensive product like a car and kills brand image which takes years to recover.
As with many things in life you get what you deserve. If you don’t intend to humbly earn it over time a manufacturer may wind up as a loser. GM probably was to arrogant in that respect expecting easy money.
My tip: stay with Cadillac and forget Chevrolet for a while. You don’t want to waste money on a wide product-line up in Market that is “not easy”. On the other hand the Chevy Bolt may fill a hole in the next years in Europe. It would be an interesting experiment for GM considering the Opel Ampera-e was apparently a serious money loser here which , as a result , was pulled out.
Anyway, Best Wishes; have a nice Christmas time and a happy New Year ( to all 😉 )
Europe wants only ZEVs (Zero Emission Vehicles) by 2025 and this falls in line with General Motors CEO Mary Barra stating how GM would be introducing 20 new ZEV by 2023; GM could begin with the immediate introduction of the Chevrolet Bolt and Volt to Europe then follow up with other new ZEVs as they come online.
EV was my first thought – it may not be super-complicated, but I wondered about all the plug variations (there are some) on 220V electricity, especially traveling from country to country.
Also, whether a different, European-compatible battery would have to be developed.
I’m sure that there may be differences but if Tesla and BMW can handle the investment so can GM. Most of the world will follow Europe anyway.
Hopefully Chevrolet come back to EU , it was bad in the first place to pull out of Europe ! And fast !!!