It isn’t often that a humble member of the Fourth Estate gets the chance to alter the course of industrial history. So I won’t take all [or even some – Ed.] of the credit, but I am certainly gratified to learn that General Motors followed my advice and killed the sale of Opel. (I had nothing to do with Fritz Henderson.) GM’s future is instantly brighter, one of the worst strategic misadventures in the great American carmaker’s 101-year history has been averted, and one has to wonder – was GM ever serious about selling Opel in the first place?
To recap, there were numerous reasons it made no sense to unload Opel, even as part of a strategy for a leaner, meaner future. So the reasons cited by GM for canceling the sale now are as good today as they were eight months ago when I cataloged them in this space by way of castigating GM for dragging one of its crown jewels in the dirt.
Opel provides major engineering support for high-mileage, electric, and fuel-cell vehicles, the stuff GM will need in coming years. The best affordable passenger car that GM sells in the United States – the Chevy Malibu – is based on an Opel design. Many other Opel models can be more or less directly transferred to U.S. showrooms, as Buick plans to do with the 2011 Regal, a near-exact duplicate of the well-regarded Opel Insignia, just on sale in Europe. Ford is following a similar strategy with compact, Euro-designed cars and trucks already coming our way.
Opel has been gaining market share in recent years, which is more than you can say for the brands GM is off-loading, and even some of the ones it is keeping. Opel also provides a beachhead for GM in the European market – one of the world’s largest, along with the U.S. and China – as well as a vital presence in the burgeoning Russian automobile bazaar.
The case for keeping Opel was, in fact, so strong that some may conclude that GM was only ever pretending to sell it, knowing that the concept of U.S. taxpayer funds going to prop up a German company wouldn’t have played well when GM approached Congress seeking its
$50 billion bailout, or when it hit the American bankruptcy courts, or, crucially, our idiot-led, cable-fed courts of public opinion.
Was it a case of doling out the facts parsimoniously while rolling out its real plans with lethargy rooted in expedience? It’s a trend worth looking out for these days.
For GM wouldn’t be the only car giant holding its intentions close to its vest lately in the mad scramble for federal funds. Toyota recently announced, after agonizing months of public dithering, that it would shut the New United Motor Manufacturing, Inc., plant in Fremont, California – its former joint venture with GM and its only plant staffed by UAW members. The announcement was quiet, but the timing was intriguing: Mere days had passed since the Cash for Clunkers program ended – a noteworthy detail, as the taxpayer-supported program had subsidized the sales of more Corollas (built at Fremont) than any other car. With the program expired, Toyota disclosed – to a Japanese news agency, for extra fact-defusing effect – that, like GM, it was bailing out of the NUMMI plant. All future Corollas destined for the American market will be imported from Canada or Japan. As Toyota’s ads once trilled: Oh, what a feeling.
Meanwhile comes word that Chrysler, which made a bold move into electric vehicles a central plank of its case for $12.5 billion of federal aid, suddenly plans to unplug its EV effort. Huh? Last January, Chrysler pledged that it would build half a million electric cars by 2013. But apparently this promise is no longer operative, with new owner Fiat’s recent decision to shutter Chrysler’s Envi division and merge electric efforts with general vehicle development, where Fiat chairman Sergio Marchionne says they’re still struggling with batteries. (Chrysler claims it’ll still build a test fleet of 220 hybrid trucks and minivans, for which it received $70 million in Department of Energy loans.)
Of course Marchionne was on – or near – the case when all the promises were being made. He, too, chose to keep quiet about his real intentions. This proves that in addition to being a shrewd negotiator – Chrysler cost Fiat virtually nothing in auto-business terms – Fiat’s boss is molto in tune-o with what appears to be the industry’s new modus operandi: don’t fight the government like you used to – just tell it what it wants to hear and then do whatever you want anyway.
Like I said – oh, what a feeling.
– Jamie Kitman
Illustration by Tim Marrs