Deep Dive: General Motors considers selling Opel to Chinese

Fact is, the role of Ruesselsheim within GM was scaled down two years ago when major responsibilities were transferred back to North America. Although the Germans did develop the underpinnings of key cars like the Chevrolet Cruze, the Opel Insignia/Buick Regal, and the Chevrolet Malibu, the small car emphasis has since shifted to Korea while Detroit is now calling the shots in terms of alternative drivetrains (Chevrolet Volt/Opel Ampera), and new crossover vehicles. At the same time, GM has pumped up its efforts to globalize the Chevrolet brand. By 2012, Chevrolet could effectively replace Opel/Vauxhall in Europe with products engineered by Opel (Sonic/Cruze/Malibu), yet built in low labor-cost Asia. This approach should yield a 15 to 20 percent cost advantage, which could be decisive in a market punished by overcapacities and cut-throat rebates. Even proposed new products like the Opel Mini (conceived and made in Korea) and the still tentative flagship model (to be based on a U.S. crossover model) would weaken rather than strengthen Opel's mission as an engineering hub in GM's global organization.

Assuming GM is really serious about selling Opel, the next question does of course revolve around potential buyers. The likelihood that Magna wants to get burned again is slim. Mercedes-Benz, which was briefly flirtatious with Opel, has since gone to bed with Renault-Nissan. All suitors must of course consider such obstacles as the uneconomical German production sites (Ruesselsheimn, Bochum, Eisenach), the strong German trade union influence, and the tough German insolvency laws (you cannot simply close a plant and walk away).

Although most parties would for these reasons think twice before investing in Opel, the one party that could be interested is the Communist party -- that is, the Chinese. Having just signed off the next five-year plan, leading Chinese politicians are now putting together a long-term scheme destined to provide its domestic auto industry with much more know-how and market power by 2020 and beyond. The Asians are aware that brands like Geely, BYD and Great Wall will take almost forever to be world-class competitors. Buying Opel, however, would provide the Central Committee with instant access to leading technologies and facilities. Unlike other candidates, the Chinese Council of State would probably even pay money for a loss-making Opel, and the cash might in fact continue to flow for quite a bit longer if GM was prepared to throw in intellectual properties and parts. In this way, the Chinese domestic car industry could instantly be virtually on eye level with those foreign investors it needed to get its automakers going in the first place.

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.

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