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Oracle of Delphi

GM can't be saved but Opel can

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GM can't be saved but Opel can

Guido Reinking

Automotive News Europe

November 18, 2008 15:27 CET

RUESSELSHEIM -- However many billions the U.S. government spends on the rescue of General Motors, everyone should understand in the meantime that this only postpones the demise of the American auto giant.

The Detroit colossus has been heading toward the precipice for years. All efforts to halt its decline have failed. The financial crisis has now turned an upstream battle into a freefall. The crash is waiting at its end.

The German federal government should be clear about this before it promises Opel, GM's German subsidiary, guarantees or loans. The issue now has to be saving Opel. GM has been doomed for a long time.

So what is to be done? Government guarantees or loans should only be granted in exchange for potential capital participation in Opel.

If the money isn't paid back, Opel has to go to the federal government or the German state-owned development bank KfW. That could be the first step to disassociate Opel from GM and to find a new investor for the venerable German brand. GM hasn't known what to do with Opel for a long time.

Under the GM corporate umbrella, the brand has risked being ground up between the low-cost Chevrolet brand and pointless luxury fantasies at Saab and Cadillac.

This doesn't just involve the 27,000 Opel employees. It also involves at least twice as many jobs at suppliers and many thousands more at dealerships.

Opel has a good reputation

Opel continues to have a good reputation internationally. Its cars have long had premium quality. The technical know-how at Opel's Ruesselsheim headquarters is a jewel of the industry.

Any company that can design a car like the Opel Insignia and build it at competitive costs does not deserve to be pushed over the precipice along with a dilapidated U.S. company. Potential investors know this, too.

And who is to blame for this disaster? It is not the wrong policy model or too many rebates on new cars. It is, above all, the U.S. social system, which is at Third World levels.

GM has had to guarantee the retirement and health costs of hundreds of thousands of retirees and employees for decades in the U.S. because there is inadequate governmental health and retirement insurance.

The company had to earn thousands of dollars per car to pay this. That is money that Toyota, Honda and Hyundai could put in their products.

It has been clear for years that GM cannot shoulder this burden over the long haul. But when the government in Washington still had time, it didn't want to hear about the problem.

Now it's too late. GM can no longer be saved. But Opel absolutely can.

Link: http://www.autonews.com/apps/pbcs.dll/arti...paign_id=alerts

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Wow...

What a one-sided, protectionist, piece of sh*t.

It's too bad that GM didn't kill Opel when GME was losing tons of money and pissing off all the labor unions a few years ago.

Here's something to chew on: Maybe Opel sucks and has a bad reputation. I mean, after all, Opel and Chevrolet were at one time supposed to share the "global brand" designation, but Opel failed even in it's home market, so GM made Chevrolet the "global brand" and now Chevrolet is wiping the floor with Opel on the sales charts.

(I know, it's all skewed truths... But i figure, since this guy can play the deception game, so can I)

If German management is so good, then why are all of their volume car companies owned by foreign entities? If German management is so good, then why did Daimler run Mitsubishi and then Chrysler into the ground on top of effing over it's own image through horrible quality problems?

Germany just needs to shut the hell up, sit back and come along for the ride. They haven't dictated the global economy since Hitler hit the Cyanide button.

(And BTW, I'm half German)

Edited by FUTURE_OF_GM
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Opel doesn't have a good reputation. Their old products have a reputation for being crap and only the latest generation is considered good. This is the observation of the non-auto enthusiast Germans I have spoken with.

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Opel has a good reputation

Opel continues to have a good reputation internationally. Its cars have long had premium quality. The technical know-how at Opel's Ruesselsheim headquarters is a jewel of the industry.

Internationally? How many people in North America even have a clue what an Opel is?

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Insulting and composed entirely of assumption and opinion.

Worthless piece.

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And Opel has not made a dime in 10 years.

Edited by evok
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Insulting and composed entirely of assumption and opinion.

Worthless piece.

+1

Chris

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Is there any public source where one can find a breakdown of cash flow by reporting region for GM?

Edited by ZL-1
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Is there any public source where one can find a breakdown of cash flow by reporting region for GM?

No-GM does not break it down. - However the sales collapse is hurting GME based upon 3Q results and GME is still paying for this 10 year restructuring. GME in the last quarter spent a billion more than it took in. But without knowing how much GME has in the bank it is tough to know what their liquidity position. It is likely sales will continue to errode further in Europe.

Edited by evok
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No-GM does not break it down. - However the sales collapse is hurting GME based upon 3Q results and GME is still paying for this 10 year restructuring. GME in the last quarter spent a billion more than it took in. But without knowing how much GME has in the bank it is tough to know what their liquidity position. It is likely sales will continue to errode further in Europe.

Makes all of the talk of GMNA emulating GME as a successful model look a bit absurd, doesn't it?

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Yes it does.

Chris

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And Opel has not made a dime in 10 years.

So they're slightly more "profitable" than Saturn. <_<

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So they're slightly more "profitable" than Saturn. <_<

<---- marks down a point for 68

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I knew who it was posted by with just reading the title. It is a one-sided piece of &#036;h&#33; all right. I really could care less about Opel, if they were so great then Saturns would be flying off lots. If it wasn't for GM Opel wouldn't be where it is today. This makes me believe GM should kill Opel and make them Chevrolets in Europe.

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Makes all of the talk of GMNA emulating GME as a successful model look a bit absurd, doesn't it?

GM's biggest problem is trying to convince the public and congress that launching the gas guzzling, high margin GMT-900 as the savior of the company in light of $140bbl of oil was just a bridge loan to the Volt - which is very suspect. However after watching the press coverage of the hearings, the Volt's good will may be just what saves GM.

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GM's biggest problem is trying to convince the public and congress that launching the gas guzzling, high margin GMT-900 as the savior of the company in light of $140bbl of oil was just a bridge loan to the Volt - which is very suspect. However after watching the press coverage of the hearings, the Volt's good will may be just what saves GM.

Here is what is worrying me THIS WEEK: GM is hurting now because of the bad press and lack of leasing. What is going to happen in light of $60 a barrel oil when the Volt comes out? Who is going to buy it? The green-zealots have already bought their Priuses. It is convincing middle America to buy vehicles like the Volt that will turn things around for GM - especially if GM doesn't invest in their trucks over the next couple years while other manufacturers do.

It is a given that GM/Ford should be saved, but it will be the greatest irony if investment in the Volt saves the company TODAY, only to sink it in 2 years.

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Here is what is worrying me THIS WEEK: GM is hurting now because of the bad press and lack of leasing. What is going to happen in light of $60 a barrel oil when the Volt comes out? Who is going to buy it? The green-zealots have already bought their Priuses. It is convincing middle America to buy vehicles like the Volt that will turn things around for GM - especially if GM doesn't invest in their trucks over the next couple years while other manufacturers do.

It is a given that GM/Ford should be saved, but it will be the greatest irony if investment in the Volt saves the company TODAY, only to sink it in 2 years.

Not many on here are going to like the answer but congress should set a floor on the price of fuel and limit or control the tax deduction for vehicle usuage for business reasons.

The public will need an incentive.

The recent swings in fuel price hurts the planning at these companies.

Edited by evok
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I think Opel's next wave of models (starting with the Insignia) could have a future in North America (if and when the economy recovers), but not badged as Saturn products. Saturn is still mainly thought of as a value brand in the U.S.; GM was quite foolish in thinking that they could move the division upmarket by simply merging it with Opel. If GME and/or GMNA insists that Saturn (and only Saturn) be the North American outlet for Opel products, then they are only setting these potentially great future products up to be miserable failures. That would be a shame.

The delusional opinions offered in the submitted article are pure trash. As much as I dislike reading this worthless garbage, my appreciation for Opel hasn't diminished. I still consider Opel as an asset of GM; its products could be a potentially lucrative venture for GMNA if GM would assign the products to a division equipped with the image and dealer base to ensure their success in this market. Saturn is NOT that division.

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Not many on here are going to like the answer but congress should set a floor on the price of fuel and limit or control the tax deduction for vehicle usuage for business reasons.

The public will need an incentive.

The recent swings in fuel price hurts the planning at these companies.

Congress has been told by a commission they setup that they need to increase taxes on fuel substantially anyway. The highway fund is broke, bridges are falling down everywhere, and they need to spend $60 billion just on intercity rail projects to relieve projected highway and airport congestion.

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