GM, PSA reportedly reach agreement to sell Opel

[RichardJensen]

While different it still costs capital, to maintain a brand there is Engineering/Marketing center in England as well and they employee people to do this.

 

Eliminate 1,000 jobs and you've saved ~100 million dollars. GM has 4 assembly plants all in high cost EU countries. Closing 2 of them would yield ~ 1 Billion dollars in savings plus the costs saving with rightsizing your production to market conditions and not build cars people don't want to just achieve economies of scale so your losses are not so bad.

 

I'd guess that GM had people in Europe that were not willing to change, that they tried over the past 4 years under the new post bankruptcy GM and Detroit finally gave up on them. The Euro managers were always saying a fix is coming, being based in Germany didn't help as German executives think they know more than anyone else and thought that they were safe because GM was out of bankruptcy. It is the same issue that Ford when though with its Euro division. PSA isn't going to take that from Opel, 2 years from now there will be a blood bath of employees being terminated and plants closing and PSA will pick a French plant to keep open over a German one.

 

What bugs me about this is that GM has the cash required to buyout employees and close plants, but they're using it to buy back shares instead.

 

Opel's track record of losses is not strictly Opel's fault. It is also the fault of GM's global management which persistently took the easy way out: to take Opel management's assurances that they had things figured out, rather than get their hands dirty and overhaul Opel's top level mgmt.

 

Part of why this turned out differently for GM may be that Ford has rotated managers through Europe ever since the end of WWII, and GM seems to have sort of let Opel run almost as an independent company on the P&L side (not the engineering side)

[630land]

"But what will Buick sell, GM needs Opel?" is posted a lot.

 

But, what are they selling the most? Encores. What is not selling? Opel based Regal.

 

If those connoisseurs of Opels wanted one, why not buy one? It's always them the expect car makers to sell "cars they like", but they never pony up the cash for a new one. Then, they fill message boards with complaints when these low sellers are dropped.