Zastava_101

A pretty good read.

http://www.autoblog.com/2012/10/11/f...-without-opel/

First: Opel is a money loser. The European economy is not only in shambles, but is one of the most competitive car markets on the planet. There is excess capacity, heavy discounting and no one wants to be the first to blink by shutting down factories thereby losing market share and more importantly increasing unemployment in their home country. In this environment, Opel is sure to remain a money loser for the foreseeable future and will soak up profits generated by GM North America just to stay afloat.

Second: GM can't afford to get involved in German politics. The company has its hands full battling its "Government Motors" image in the U.S. and can't risk being involved in internal German politics if it moves to close factories there to stop the financial bleeding. Also, the fact that the U.S. government has seats on the GM board is also likely to figure in any decision regarding its German unit because of the impact any layoffs there will have on international relations between America and one of its largest European allies. If GM can unload Opel in a way that is politically acceptable to the German government, it rids itself of some messy decision-making that has to come soon.

Third: Unloading Opel will boost GM's stock price. If GM is able to find a new owner for Opel, it will strengthen its bottom line by getting rid of a source of negative cash flow and debt from its books. The other benefit of a higher stock price is that it would make it more attractive for the U.S. Treasury to sell its stake in GM (something that management desperately wants) and allow it to get the "Government Motors" monkey off its back once and for all.

Fourth: By selling Opel, GM will clarify its joint venture relationship with France's PSA. While there may be some platform synergies among GM, Opel and the PSA group (which includes Peugeot and Citroen), this relationship does little to reduce the capacity of the various partners, which is a critical step towards profitability for all. With Opel out of the picture, the capacity question becomes less of an issue between GM and PSA. It will also allow GM to move forward with just one European partner instead of two, making life much simpler.

Fifth: With no Opel in the picture, GM has the opportunity to strengthen the image of both Chevrolet and Cadillac as global forces. GM has been working hard to build sales of both Chevy and Cadillac in Europe, establishing both as true global brands. Cadillac is clearly in the luxury segment and has little product overlap with Opel. Chevy, on the other hand, competes directly with Opel on the Continent and with the Vauxhall sub-brand in the UK with its Cruze. The fact that GM spent $600 million in a marketing tie-up with the Manchester United soccer team underscores the magnitude of the company's commitment to making Chevy a major player across the pond. Getting rid of Opel opens up the playing field to a broader range of Chevrolet's products in Europe and also allows for a product strategy that better leverages the PSA joint venture to market the fruits of that relationship under the Chevy banner.

Twin Turbo

Interesting........

I'm not fan of Vauxhall, Opel's UK sister, as most of their cars have always been more dull to drive, especially when compared to their Ford alternatives. My wife owned a little Nova SR, which was supposed to be a "sporting" hatch. Dull dull dull. May years later, we bought a used Zafira, the 7 seat MPV. After taking it on a driving holiday for a week, with me doing most of the driving, we promptly traded it against a BMW 5 series Tourer. The Zafira was just horrible to drive........almost impossible to drive smoothly with a clunky gearbox and nasty clutch....and overly stiff excellerator. Nasty! The Galaxy we have now is 10 times the car the Zafira ever dreamed of being.

Anyway.......whilst I can understand why the American parents would want to trade-in their poor performing European offspring, surely it's not as simple as that.

Ford's One World strategy is much more obvious, with cars like the Fusion (Mondeo), Focus and Fiesta being developed to sell both in Europe and abroad.

Cars like the Chevy Cruise just don't seem to be as well developed for European tastes. The Astra equivilent just seems to be better in terms of the way it drives and the way it looks.

Until GM have some cars that will really appeal in Europe, I think it's a bit premature to be looking to close Opel/Vauxhall.

Mind you, Opel/Vauxhall seem intent to shoot themselves in the foot. They develop a quite nice looking little city car to take on the Fiat 500........and call it the Adam

Zastava_101

Paul, correct me if I'm wrong, but Cruze is also much much cheaper than the Astra. I remember reading a comparison between a base Cruze and a base Volkswagen Golf in one Serbian magazine over the summer. Golf was a much better car overall, but for 15,000+ euros you get no standard equipment and a weak 1.2L petrol engine rated at ~80 hp. Cruze was much better equiped and it had a standard 1.6L petrol engine (rated at ~110 hp or so) - and Cruze also had a price of like 10,500 euros (after the discounts).
Last year I have spent a lot of time in the eastern Europe, especially Balkans, and I traveled a lot through Serbia, Croatia, Bosnia and Montenego and there are a lot Cruzes there. Its simply much cheaper than the German competition.

Now, I wanna say a thing or two regarding this whole GM - Opel issue ...

I think both sides are being crybabies.
First of all, I don't think GM can build good small cars without Opel's help - they never could. That might be fine in the USA (Korean Chevy Cruze is selling well), outside the USA that's a big problem. In Europe, Korean Chevys might compete against Skoda and similar companies, but not against top companied like VW and Ford.
Second of all, Opel is a too small of a company to survive on their own. I don't know what's their problem - they haven't made profit in 13 years in a row and GM is still paying all the bills and investing money in new products. Who else would've done that? German government maybe for few years, but not 13 years in a row.
If Opel would become independent, they would end up like Mazda - they would celebrate at first, but few years from now they would be looking for a much larger partner to share expenses, because they wouldn't be able to survive alone.

During the 1980s and early 1990s, Opel had great cars. Much better than Fords and almost as good as the Volkswagen. Every time I go to Europe I see so many of these Kadetts on the streets and they're all 20+ years old.
Instead of trying to go premium with vehicles such as Adam, Zafira Tourer and Cascada, Opel needs to go back to building vehicles strategy that made him famous.

Mark Fergel

Think GM would then need to do something for Buick. China is a HUGE, HUGE market for Buick and with so many of GM's cars being rebadged Opel's now that means GM would have to find an alternative to the Opel first.

(Guess, that really should have said "with so many of GM's "BUICK" cars being rebadged Opel's).

.........also, I personally think that had Saturn started using Opel's sooner they might have lasted (or at least lasted longer).

Twin Turbo

Zoran, you're right, the Cruz in more bargain basement motoring than the VW and Ford alternatives.

Personally, I think GM screwed up by re-badging the old Daewoos as Chevrolets. These were really cheap and nasty cars (I'm thinking of the old Matiz, in particular). The latest Chevrolets in the UK are better, but GM didn't give the brand a good start, in the UK at least.


And the Chinese market is a good point as Buick do seem to be just using re-branded Opels as their starting point there.

Zastava_101

Vauxhall-Opel has revealed an audacious 10-year restructuring plan that, 
while acknowledging further tough conditions over the next few years, will
 have it breaking even by 'mid-decade' and moving on 
to 'profitable growth.' 
The plan, dubbed Drive! 2022, was revealed by GM Europe
 president Steve Girsky and vice CEO Thomas Sedran at the unveiling of the first production model of the new Adam.
Under the plan, which was approved six weeks ago by GM's main board,
 Vauxhall-Opel will cut fixed costs by $500m by mid-decade, launch 23 new models and 13 new engines between now and 2016 and start building non Opel-Vauxhalls (probably Buicks for China, and some Chevrolets). It will also expand and implement the recently announced alliance with PSA.
According to Girsky and Sedran, Drive! 2022 demonstrates GM's long-term commitment to Opel-Vauxhall, which it once sought to sell but decided to retain at the last minute. Opel-Vauxhall is also viewed as a microcosm of GM's global problems with costs, model range and management. Fix this, and you will know how to fix the rest.
The restructuring plan, which its authors freely admit is the latest of 
many, is the first “not to include hope as part of the strategy" said 
Girsky. A three-phase programme will “cut the cash flow gap” between expenditure and income, followed by new cars, powertrains and technologies to break even around 2016. New commercial vehicles, improving Russian sales and achieving a planned 90 per cent plant utilisation will complete the process. 

According to Girsky, some of the ground work has already been done. In 2012 Opel-Vauxhall launched six new models, sold more than a million cars as Europe's third biggest brand, slashed stocks of unsold cars, and re-configured Astra production in two plants (from three). It also faced up to the tough decision of closing the Bochum plant from 2016.
Girsky and Sedran had warm words for Vauxhall, which they cited
 as the fastest-growing retail brand in 2012, the leader in sales of
 commercials and the number one seller to police fleets. “Vauxhall 
is an example of best practice,” said Girsky, acknowledging particular
 difficulty with the German market. “It shows how we can get the job done.”


http://www.autocar.co.uk/car-news/in...auxhall-rescue