GM Board Decides to Keep Opel

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The saga continues

By Michael Gauthier
November 4, 2009 3:58 PM
Filed Under: American, Corporate/Financial, General Motors, Industry, Opel, Vauxhall

In a surprise move, GM's board of directors has decided to keep Opel. While details are scarce, the board believes Opel and Vauxhall are vital to the success of General Motors.

As you may recall, a 55% share of Opel was put up for sale shortly after GM went into bankruptcy. After months of review, GM announced Opel would be sold to a joint-venture lead by Magna International.

The decision to keep Opel likely caused a few curse words to spill out in Berlin, as the government had promised to provide 4.5 billion euros ($6.58 billion) worth of funding to Magna. According to a government spokesman, Ulrich Wilhelm, "The government regrets the decision of the General Motors board to restructure Opel itself and to keep it in the group." Several officials are now demanding that GM repay 1.5 billion euros ($2.2 billion) in bridge financing provided by German state banks.

Regardless, CEO Fritz Henderson stated "GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future." This likely means GM will be lobbying the German government for some of the money promised to Magna.

While Opel had been a critical partner for the ill-fated Saturn brand, GM is now positioning the company as a key player for Chevrolet and Buick. The upcoming Buick Regal and next-generation Chevrolet Malibu will be heavily based on the Opel Insignia, not to mention the recently nixed Vue-ick was basically a rebadged Opel Antara.

Source: autonews.com

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Tags: GM bankruptcy, Magna, Opel sale

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Comments

nederina

November 4, 2009 4:10 PM

What GM is still alive? I feel sorry for the Germans

Renegade

November 4, 2009 4:56 PM

Nope, GM is a better owner then Magna and some Putin owned russians.

catchmyshadow

November 4, 2009 4:31 PM

i think that was the greatest hoax in automotive history. GM have been playing the time card from day 1 and thousands of opel workers in europe have to pay a big price of now.

xLumino

November 4, 2009 4:35 PM

thank you nederina...

It's so sad, GM is so unseriously with it's decisions. Opel don't will have a chance to come on. New partners here, new position there.. I can imagine, if GM will keep the Adam Opel AG as the leading company in the concern beside Chevrolet and Holden, the whole structure will be stabilised. But they have to invest in this brand in europe. There is the basic of success. Germans factories are scared about the imagine, GM will limit their production. This might be the completely wrong turn

autoficianado

November 4, 2009 4:53 PM

that's all you got say? I wish GM had off loaded Opel as well but because it is losing money and who ever gets stuck with it pays the bill. The Germans tampered with the bidding process by only providing financial support for a deal with Magna and thats why the EU is investigating. The German government got what it deserved by playing back room politics and trying to throw the other countries with Opel plants under the bus and make them take the employee reductions. Opel has too many employees in Germany and excess capacity. There has got to be employee reductions and restructuring for Opel to survive no matter who owns it.

Edited by user on November 4, 2009 at 4:55 PM

sub39h

November 4, 2009 4:58 PM

common sense prevails! hurrah!

you could take all the Opel models, rebrand them as upmarket cars in the USA and make a decent mark up off them. (they used to do that - the Opel Omega used to be a Caddy.) i know somebody's going to say, "look at Saturn! it didn't work for them!"

my rebuttal would be that dooming the cars to a failing marque was a stupid plan in the first place. Opel has the chance to make a lot of money. they have strong engines (particularly diesel and small petrol engines), new technology and good build quality. these are all things missing from GM's US lineup.

autoficianado

November 4, 2009 5:11 PM

everyone seems to forget Opel Technology is GM's Technology. GM & Ford have been slowly integrating their platforms and purchasing to unlock economies of scale and greater profit. the other problem is simple the Americans are not going to buy the safe smaller cars that Eurpeans will until gas prices remain above $3.50 and diesel is more expensive in the US than petrol. The virtues of Opel will spread throughout GM's brands and help to make them all better built and more efficient cars. There is one alternative for the GM haters. Let Opel go bankrupt. GM already owns the Technology and the platforms. Is that better?

sub39h

November 4, 2009 6:43 PM

Opel works independently of GM. it's engineers, design works and factories are all different. GM may own Opel, but letting it go bankrupt would also lose it the ability to harness that technology, or indeed create newer and better technology for the future.

European engineers are better at their job than American ones, and that's been proven time and time again through the auto products that have been coming out of Europe compared to the US for the past 20 or 30 years. (and before you cite the Chevvy Corvette or Camaro or something as proof against my comments, bare in mind that cars like that are also by far and away in the minorty. every dog has its day.)

Edison

November 4, 2009 5:12 PM

Obviously you've never driven a Cadillac CTS, or XLR. BTW, neither are built on Opel underpinnings.

pxsupply

November 4, 2009 5:51 PM

Does this mean that they will keep Saturn alive as well?

alessandro

November 4, 2009 6:51 PM

By ADAC are Opels one of the most reliable brand in German roads and rest of GM production is near bottom of that ladder. So an example answer to Edison's comment: Why in earth I should drive a Cadillac?

Edited by user on November 4, 2009 at 6:52 PM

MutantSushi

November 4, 2009 11:04 PM

Merits of GM aside, I think keeping Opel is a smart move on their part. And if Germany hadn't tried to manipulate the process against other countries and EU, they might have pulled off the sale already.

Dolomight 74-86

November 5, 2009 12:49 AM

Oh well Frank Stronak won't own a car company anytime soon. I knew those guys at GM would pull some dirtbag sh*t like this.

radmeister

November 5, 2009 4:41 AM

"Adam Opel AG, commonly known as Opel, is a German automaker. The company was founded on 21 January 1863, began making automobiles in 1899, and was acquired by General Motors in 1929.

Passenger car production did not resume until 1947, before which the factories had been badly damaged by Allied bombings, and production assets for the Opel Kadett had been seized by the Soviets as war reparations. This Kadett was the basis for the Soviet Moskvitch 400/420 automobile design.

GM regained control of Opel in 1948, and the Rüsselsheim factory was rebuilt in 1950. In 1962, the company's 100th year, a new factory was opened in Bochum, initially for production of the revived Kadett.[8]

By 1972, Opel was once again Germany's largest car maker.

In 1982, another new factory was opened in Figueruelas, Zaragoza, Aragon, Spain, initially for production of the Opel Corsa. "

-Wikipedia

So i don't see how GM or any country has more claim to Opel than the germans, seeing how GM had no real control of the company until 1950 when the factory was rebuilt, that was 48 years of german ownership, and a plant outside of germany was not built until 1982. As far as i am concerned this company other than on paper and stocks is owned and run by Germans.

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