August 25th, 2009
03:26 PM GMT
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LONDON, England –It's obvious General Motors is having second thoughts about parting with its European silver. For sure, it may still go through with selling a (large) stake of Opel to Canadian car parts maker Magna and Russian interests - but not on the terms that up to now have been reported in the press.

GM Motors has emerged from bankruptcy –- but what should it do about Opel?
GM Motors has emerged from bankruptcy –- but what should it do about Opel?

GM Europe is really only Opel (and its much smaller re-badged Vauxhall brand.) Opel could have a bright future when economies recover, moreso now that GM has the power to close plants, move production and do all the things a car manufacturer does to cut costs following its emergence from bankruptcy.

If Opel starts to let in other major shareholders, then GM losses the ability to make those decisions on its own, missing all the potential ("potential" mind you) profits if it calls the market right.

GM would also lose some of its intellectual property, which would end up in the hands of a Russian car maker. Why would GM contemplate that?

Having said all this, GM no longer has the final word on what happens to Opel. Remember, Opel is run by a trust with two GM appointees, two German government appointees (German taxpayers put in billions of dollars to keep Opel operating while GM went through U.S. bankruptcy protection) and one independent member of the trust panel.

GM must be, and is, getting much smaller. But it's now out of bankruptcy, it's temporarily restored a few suspended factory shifts at North America plants (thanks to Cash for Clunkers) and now it's having second thoughts about Europe.

What do you think? Should GM sell a majority stake of Opel/Vauxhall? Or stick with it?



soundoff (31 Responses)
  1. JAy.

    I have always thought that GM selling Opel is a bad decision. Point of proof number one is the popular and successful Chevy Malibu. It shares a platform with Opel and Vauxhall versions of the vehicle. I am not sure that GM could have pulled off the Malibu with only the North American market to support it.

    Of course, not all cross development will be successful (e. g. the demise of the Saturn line, which had become essentially re-badged Opel vehicles), but without some European sharing, GM will be losing considerable economies of scale.

    August 25, 2009 at 4:31 pm |
  2. Carlos Brusius

    GM schould stay with Opel !

    August 25, 2009 at 5:00 pm |
  3. solomon

    Although my english is not up the level where CNN readers may expect to see in this website, I would like somehow try to put my comment. By the way as an african I am living in Germany since quiete a long time.
    To my mind GM must be in any way a majority stake holder of Opel Vaushall. This is because as we know the tradtion of the GM USA was heavily dependent in producing not fuel efficient CARS for the late decades where the price of gasolin was for the majority of americans and the consciousness of global warming was not a concern. Now things has dramatically changed in regard to the price of Gasoline and the politics of global warming. Therefore we are witnessing every where how the demand and the need for feul efficient hybird cars are growing. That is why we witnessed GM BEING OVER TAKEN BY TOYOTA and finally went to insolvency. Now, we knew GM is out of Insolvency. To keep the new GM profitable and competetive it needs new restructuring not only for saving but fresh mind setting. Therefore Opel company here in germany have well established Engineers that can carry out this task and help GM in becoming the leader in the modern auto industry. As you might have heare the new GM model Chevy VOLT is to the large part technically designed here at the opel company.
    The other reason is, it is completely clear even for a deaf ear in Germany, that the russian are trying ,already have done and still fighting at any cost , ........at any cost , that Canadian, Austrian, Russian bank group to have a major stake in OPEL VAUXALL and later with the help of the German goverment to throw out theGM OR to keep it as helpless minority stake holde. In doing so the GREATEST ambition of the Russian goverment is,CLEARLY UNDERSTANDABLE, to indirectly own the Intellectual properties of OPEL WHICH GM HAS BEEN UN RELENTLESSLY WORKED FOR MORE THAN THE LAST 80 years.

    August 25, 2009 at 5:13 pm |
  4. terence sullivan

    the yanks are stupid to let go opel/vauxhall.do they want to be a provance of china

    August 25, 2009 at 6:05 pm |
  5. robert lobell

    GM's position is easy to understand.

    Why sell a going concern witth good products, to potential rivals ?
    Neither the Russians nor the Canadians, have the experience
    of designing and manufacturing cars for the global marketplace.
    Both bidders have their hands out for government aid. And both bidders will not be constrained to keep employment at present levels.

    If GM has the freedom to pare employment levels I see no reason for
    them not to try it on their own.

    August 25, 2009 at 6:11 pm |
  6. Jimmy

    I was really surprised when GM decided to sell off its European operations earlier this year. After all Opel and Vauxhall have been profitable cash cows for GM and did not start to struggle until the worldwide crisis hit last year.
    Vauxhall in Britain and Opel in the rest of European are extremely popular brands and have a huge market share. I therefore believe that it is in GM's best interest to hold on to its European operations.
    Instead they should have slashed a few more brands in the States and reduced the ("Wasserkopf") bloated bureaucracy in Detroit and finally made some substantial investments in R&D.

    August 25, 2009 at 7:30 pm |
  7. yiannis

    Germans have proven that they can style and engineer supreme cars and run an automotive business in a very successful manner. Whenever the Germans tried to run an American brand or when the Americans tried to run a German brand the result was disaster – let the Germans run it. I lived 14 years in the US and 25 years in Europe. The cultures are so fundamentally different in what they look for in cars that it will be tough to run a business on the other side of the atlantic.

    August 25, 2009 at 8:24 pm |
  8. E.Stockmann

    Germans and the workers at Opel want to be independent from GM;
    Also the Magna deal would open the russian market. What imports for the german government is maintaining labor . As Opel has now some excellent products in the market ( backorders in Germany) it is probably to late for GM to go back . Also a huge amount of monay is needed to assure Opels future. My opinion: GM – Let OPEL go.

    August 25, 2009 at 8:34 pm |
  9. Ray

    On the one hand I can understand GM not wanting to sell. In recent years Opel has made great strides in turning it's product line and image around in Europe and is today much better off than it was, say 2-3 years ago in terms of its acceptance within Europe. Why should you sell one of your most valuable divisions?

    On the other, Germans and Americans both have a vested interest in seeing both GM and Opel survive and GM has shown itself unable to manage a far-flung global market, much less understand the specific consumer tastes of foreign markets. If GM gets into trouble again (and there is no guarantee it won't), should it be allowed by both now directly involved Governments to drag down Opel with it?

    The Germans I have talked to say enough is enough. Let Opel go and give up on the dream of what GM used to be. The separation is in the best interests of both companies. Just because this company made it out of Banmkruptcy reorganization in record time doesn't mean they have changed completely. Do what is just! Let Opel go!

    August 25, 2009 at 8:56 pm |
  10. Evan

    GM should take a look at Ford's large and profitable European operation. GM can start increasing its European market share around a new Opel, or it can sell the company off to Russia (not exactly a paragon of automotive quality itself) and lose its tentative continental foothold forever.

    August 25, 2009 at 9:02 pm |
  11. George

    GM should keep Opel. The Malibu and some GM's best small platforms come from Opel.

    I thought dumping the brand was foolish. Opel might make a good fit with Buick, too, much as was envisaged for Saturn.

    August 25, 2009 at 9:11 pm |
  12. peter m allan

    Stick with it, but only if you can get Wiediking to manage it! He has the know how and is probably just dying to mess around in VW's front yard. With him in the drivers seat it will also probably be easier to raise the cash needed. Good luck.

    August 25, 2009 at 10:03 pm |
  13. jan vanhooydonck

    As the son of a GM manager in Europe, at the dinner table we often heard my father complain about the very distinct visions between the Europeans and the Americans. As the European team always advocated small cars and fuel efficiency, the Americans insisted on huge engines and 4×4's. In addition, their interest often waned from making cars to shooting satellites into the sky. Regardless of who's right or wrong, does emerging from bankruptcy really mean that they have finally found common ground to take the company forward?

    August 25, 2009 at 10:10 pm |
  14. James

    Keep it, GM will need it to balance its market share globally. Its better to fix what you have than start from new. Selling a large portion of assets to unwanted guests will in the long run cost you more to devorce them. Keep GM a GM as possible.

    From Tokyo

    August 25, 2009 at 11:44 pm |
  15. Dan

    It really confused me when GM said it was selling off its European arm of its company. In fact it completely left me flabbergasted that they would be so naive to let their connection with fuel efficient Europe out of there hands. How can they possibly think that relinquishing the intelligent part of design and the fact they started rebranding European models under the Saturn brand in the US just added to the confusion. Seems to me GM really doesn't have a sound plan and will be behind the curve in terms of technology because the let go of the Germans. Europe's gain America's loss.

    August 25, 2009 at 11:48 pm |
  16. Rob

    Keep it, keep it, keep it, keep it, keep it!!! Opel is the best "division" in GM. Period. Bye-bye SAAB, bye-bye Pontiac, and good riddence Hummer. Sorry you gooned up Saturn. But, oh well...

    The car-buying public has changed and will continue to do so. Opel is well positioned and builds cars that Americans are ready for. The Catera failed because it was Americanized (and into a Cadillac no less...blah). I bought nothing but GM for years...then I drove my first BMW and I've not looked back. But get me something along the lines of Opel's better road machines – and please DO NOT Americanize them – and I'll think again.

    August 26, 2009 at 12:19 am |
  17. Oliver

    GM greatly profited of its European brand in advanced design (both in aesthetics and fuel efficient engines). Both US and German tax-payers have poured millions of dollars and euros into GM. Since Opel and GM are so highly intertwined it will be difficult to seperate the two. However, gas guzzling SUV are not the future (yes, even soccer moms need to understand this). Opel has shown with the "Insignia" model, that cars can be still be sexy and big and still have great mpgs. GM needs Opel, however, GM needs to be truthful to its new financeers: German and US taxpayers.

    In times where banks are paying out outrageous bonuses to greedy CEO and managers with taxpayer money, GM needs that some companies have learned their lesson and do have some sense of honor. As such, GM either needs to finally get rid of its money loosing gas guzzlers or allow Opel to stand its own. The workers at Opel as well as the taxpayers on both sides of the continent should not need to pay for a misguided love affair with outdated weekend warrior technology. GM already is working toward the right path when it comes to the Chevy Volt (and its Opel version in Europe)

    August 26, 2009 at 1:18 am |
  18. M.Liedts

    GM Europe and GM China by the way actually make quite decent cars which they could have sold in the US or the rest of the world more aggressively.
    They do compare favorably to the monsters GM US made. I never understood why there was no cross breeding.

    August 26, 2009 at 3:16 am |
  19. ricki

    Hi ... my simple opinion is that Opel is a German icon , which represents the country and its people ... how did GM ever originally adquire a stake in it ... ? ... answer that question first ... !!

    OPEL is GERMANY .... !!! ...

    Ricki

    August 26, 2009 at 3:56 am |
  20. John

    GM's slow demise began in the 1960's when the accountants took over and they have vever looked back up the hill since. The GM strengths prior to this existed in the distinctive brands which had unique value propositions and catered to different segments of the market. Chevrolet, Buick, Oldsmobile, Pontiac, Cadillac, and GMC were all very different cars and the GM ideal of trading up brands within the GM family was a noble pursuit. How many owners of Buick's desired the Cadillac? I can still hear my grandparents speak! So what happens? Accountants are placed in charge of GM and the horrible words "synergy" and "optimization" come into the picture. Platforms, engines, parts, guages, door knobs, every part possible that could be shared across brands was shared and the brands stopped being distinctive and in many cases merged to the point where they lost their competetive advantage and stopped being great. It just took them another 30-40 years to finally fall over the edge, and had gas not been cheap in the 1990's, they would have died then. SUV's provided a lifeline which they did not take advantage of. Yet, there was this brand in Europe, Opel, which GM purchased and ran independently and has been highly successful for years in creating small cars for the European market theat people actually desire! Yet, GM intentionally kept Opel out of the US for fear of diluting their brands....which they themselves had already diluted. Now, we have a government owned company who has based it's survial on the creation of....small fuel effiecient cars....and who wants to sell off one of it's best managed units, Opel, which makes......small cars!!! Who are these people? Why did the government give this proposal so much bloody money? This is like watching a clown college graduation (no disrespect to clowns intended). This is the dumbest thing GM could do in selling Opel. What they should do is learn from Opel and either import the cars from Europe or manufacture them in the US, under the Opel brand becuase all the GM brands, outside of Cadillac, might as well already be dead. There is no need to re-finance the creation of the wheel, yet this is the psychotic path we are on (no disrespect to the psychotic intended).

    August 26, 2009 at 4:09 am |
  21. David J

    Opel makes some pretty good products – my Astra Estate has clocked 117k+ trouble-free miles.

    Having said that, why does GM lose so much of the original design when it imports for US buyers? Same with Ford – perfectly good Euro originals, wrecked after the suits and marketeers have got to them.

    For ownership to work – especially in the future – this basic item needs looking at.

    August 26, 2009 at 5:42 am |
  22. melih

    Opel is the only good car line they have.They better scrap the old bulky chev vies,buicks and cadillacs and stay with opel worldwide.

    August 26, 2009 at 6:58 am |
  23. Glenn B

    An American living in Europe for 20+ years says: As many commenters have already said: Opel (German) engineers have it all over the clowns at GM (esp management) in the States. They can't build anything of the quality of a German Opel, nor can they build anything that they can make a profit from that isn't a gasoline-sucking monster SUV or truck. Over-powered glitzy ego-tankers.
    Opel can show GM US how to make quick, nimble, fuel-efficient but still stylish (and roomy!) cars which we all need if we're to have any hope of reducing our dependence on foreign oil and lowering carbon emissions.
    So my take is: GM should be run by Opel!

    August 26, 2009 at 7:26 am |
  24. Gathuki.

    I've never driven anything by GM or Opel,but from a purely business fundamentals point of view,even if you were selling assets to raise money,you wouldn't sell the profitable aspect of the business, would you?From the sentiments in the article,it would seem that Opel was dragging GM along the road to fuel efficiency screaming and kicking.Its no surprise that I drive only Japanese cars.A car must at the end of the day be functional.Huge cars with monster engines can't be anyone's idea of where the automobile industry is headed.And that's why GM really should keep Opel,its the only aspect of their organisation that has an inkling of what needs to be done to get back into the game.

    August 26, 2009 at 9:24 am |
  25. Wolfgang

    the problem for the germans is the "kind of acting" of GM.

    August 26, 2009 at 9:48 am |
  26. Anthony

    GM should still have Opel

    August 26, 2009 at 10:36 am |
  27. Stefan

    GM should part ways with Opel. GM is the worst ever when it comes to service delivery,

    August 26, 2009 at 10:43 am |
  28. felin

    I wouldn't say that "OPEL is GERMANY ". I think that Opel wouldn't be where it is now without GM. In the past, both sides could benefit from the synergies.

    GM, please keep Opel! Any other solution would be disastrous for both sides.

    Marcus (Germany)

    August 26, 2009 at 10:44 am |
  29. Julian

    GM should keep Opel plus Vauxhall. To make them "more GM" they should be renamed GM Opel (GMO) and GM Vauxhall (GMV) in a similar manner to Australia's GM Holden (GMH).

    GM needs both GMO and GMV as integrated parts of it's world operations to ensure it's survival. Both GMO and GMV have very good cars (sold as GMH in Australia). Some of these cars should be sold in the States.

    GM needs to stay as a complete (diversified) car company makeing every type of vehicle (cars, trucks, buses, etc) plus auto parts (AC Delco) and have non vehicle businesses. Diversification helps keep a company in business through the different profit / loss cycle timings.

    If GM sells both GMO and GMV, they risk a future of becoming another Chrysler. Chrysler retreated from Europe in the late 1970's / early 1980's. Now Chrysler is a shadow of it's self. Will Chrysler survive as a real car company or become a US re branded Fiat?

    August 26, 2009 at 2:31 pm |
  30. Hendrick

    Already in the late 60s GM changed its business priority from building cars to making money instead with the labor unions much in cahoots under a central management seemingly utterly deprived of global cultural sensitivity and social conscience.
    German, British and South-American GM operations mostly forged ahead despite the inapt decision making in Detroit for that matter.
    In finding solutions for GM we must first define what we ideally expect of this company and find a synthesis of interests and possibilities to secure a future for this Company.
    The interests of stockholders, consumers, workers (be it American, British, German, Brazilian or Chinese) must be respected.
    Voting rights on stock should in the future perhaps be based on a square root based representation to limit the often destructive powers of hedge funds and greedy banks (in short the Wall Street Casino) in order to let good governance prevail with an eye on the future instead of short sighted stock manipulations.
    It would be wise for GM to diversify ownership of its foreign operations and allow more input from abroad in decision making process from which all parties would benefit and could restore respect and confidence in the Company, its product and its business philosophy and ultimately solidify its market position and future
    Vilification of for instance Russian interests and possible participation is dead wrong in my view since this is a Country on the move with enormous resources, something quite well understood by the Germans. Let’s close ranks, forego conflicts and find solutions!

    August 27, 2009 at 7:55 am |
  31. abass A

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    December 14, 2009 at 4:26 pm |

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