Suffering losses of $747 million last year, and $1.76 billion a year prior, Opel hasn’t been a bright spot in GM’s post-bankruptcy portfolio. A report from Forbes suggests the failure of GM’s European operations is what’s holding back the U.S.-based automaker’s stock. We’re interested to hear your take on what GM should do with Opel, but let’s first review what GM has done with Opel since emerging from bankruptcy in 2009.
A controlling stake in Opel was nearly sold to a group led by Canada’s Magna International in 2009, a move supported by the German government, which offered up to $6 billion to finance the transition. By November 2009, however, GM choseto hang on to Opel, and instead asked European governments to assist in the brand’s restructuring. Receiving little help from Germany, GM decided in September 2010 that it would pump $4.2 billion of its own cash into Opel.
That loan was made after GM paid back $6.7 billion to the U.S. Treasury, but prior to the IPO launched in November 2010. This meant neither Wall Street nor the federal bean counters were paying close attention, Forbes suggests. Those funds were meant to stabilize Opel, but two years later the European automaker continues to lose money. Since 1999, GM’s European arm has lost $17 billion. The company is being led by its fourth CEO in three years, and Forbes says further restructuring may be on the way.
GM’s unsuccessful European venture is just one issue holding back its stock. With that said, what do you think GM should do with its European operations? Should the automaker pull out of Europe entirely and focus on the home market for now? Or should GM hang onto Opel, which has helped engineer many U.S.-market products? Share your thoughts in the comments section below and read the original blog at Forbes.