Deep Dive: General Motors considers selling Opel to Chinese

deep-dive-general-motors-opel

General Motors is said to have Washington's approval to divest from Opel, it's loss making European satellite, and has been in high-level talks with the Chinese government since early May. The timing and conditions of such a deal remain unclear, but it is far enough along to alarm the German government, which has asked Volkswagen Group to take over Opel and stave off Chinese involvement.

In 2009, GM very nearly sold Opel to a consortium led by Magna and Russia's Sberbank. But at the eleventh hour, the company changed its mind and backed out of the deal. When this decision was announced, the German chancellor Angela Merkel was in mid-air on her return flight from Washington, where she had celebrated the twentieth anniversary of the fall of the Berlin wall -- and lobbied on Opel matters. The decision by the Obama administration meant a political defeat for the snubbed German leader, who was on the brink of signing off various life-saving measures for the ailing German brand.

With Chapter Eleven looming, GM dethroned Opel head Carl-Peter Forster and installed Nick Reilly as new integrator maximus. Despite a wave of fresh products and massive incentives, the brand is still bleeding cash. In the third quarter of 2011, Ruesselsheim lost almost $400 million. In the very same quarter, the mother from Michigan earned $3.2 billion. Even though the US administration has step by step reduced its interest in GM to one third, red ink is the last thing Dan Akerson and his team need to steer the car maker toward full independence and greater profitability. In an interview with Germany's Cicero magazine (May issue), the former "car czar" Steven Rattner said: "Last year, Opel lost 1.8 billion Euro. Dan Akerson is not going to tolerate this much longer....Opel needs to watch out."

Since he failed to engineer the turnaround in time, Nick Reilly was sidelined, and Opel veteran Karl-Friedrich Stracke was appointed as new chairman of the board. Although this move was supported by various restructuring and streamlining initiatives, insiders are convinced that the powers in Detroit still want to sever their ties with Opel as badly as theydid back in 2009. We contacted the Opel press department and tried to get a hold of Nick Reilly, but the only official response was a lukewarm "No Comment."

1 of 4
kego53
What will GM build Buicks off of in the future if they sell Opel? Chevy and Cadillac probably have more Opel content in them than GM would like to admit also. Looks like selling the goose that laid the golden egg, hoping to throw dust into the eyes of consumers with the intent to conceal the origins of their most successful models. Whatever, this is true to form GM modus operandi.
Observer0
"Holden is the de facto Australian Opel."@Speed 3. Just for the records: This simply is wrong. The only remaining Holden, which is derived from Opel is the aging Combo. Just see Holden's website.
Observer0
I am citing a recent report from the Detroit News: "Akerson said GM is making progress in turning around its troubled European unit, which lost $1.8 billion last year. The company broke even in Europe in the first quarter before one-time charges. He described Europe as no longer the "abyss we were looking into" 18 to 24 months ago."To me this does not sound at all like an intended sale of Opel. Why should GM sell Opel just now, after it's gaining traction, after 7 months of consecutive market-share growth in Europe and investing billions for its restructuring??? Furthermore, I hardly do believe that the German antitrust authority would approve Opel's takeover by VW. Sorry, but this entire report is nothing but pure non-sense to me! I guess these rumors were launched intentionally by German media and an Opel competitor in the background (if not VW itself) in order to damage Opel's reputation, i.e. to hurt its growing success.
Speed_3
Wow so GM may really sell Opel. The relationship has always been Opel gives and GM takes, so its not surprising that GM is ready to dump Opel when it has no more to give. In terms of strategy, this will really decimate GM's presence in Europe; I doubt Chevrolet and Cadillac will make up the volume of Opel anytime soon. Also, what does this mean for Buick and Holden? Holden is the de facto Australian Opel. I always thought that a Chevy--Buick/Opel/Holden/Vauxhall--Cadillac strategy would have worked well globally. It looked like that is where GM was going was creating a global entry-level luxury brand which changed name with continent. Oh well. Lets hope GM knows what its doing (I doubt it).
Speed_3
Wow so GM may really sell Opel. The relationship has always been Opel gives and GM takes, so its not surprising that GM is ready to dump Opel when it has no more to give. In terms of strategy, this will really decimate GM's presence in Europe; I doubt Chevrolet and Cadillac will make up the volume of Opel anytime soon. Also, what does this mean for Buick and Holden? Holden is the de facto Australian Opel. I always thought that a Chevy--Buick/Opel/Holden/Vauxhall--Cadillac strategy would have worked well globally. It looked like that is where GM was going was creating a global entry-level luxury brand which changed name with continent. Oh well. Lets hope GM knows what its doing (I doubt it).
sbdude
Sounds like GM has once again SAABed the hell out of another brand, and one that provided it with invaluable engineering and technology. Buick wouldn't be what it is in China (and perhaps the U.S.) without Opel. This reeks of robbing peter to pay paul.

buyer's guide

Find vehicle reviews, photos, & pricing

our instagram

get Automobile Magazine

Subscribe to the magazine and save up to 84% off the newsstand price

subscribe

new cars

Read Related Articles

TO TOP