GM will stick with European operation, but sharpen scalpel again

[67impss]

Until about six weeks ago GM Europe's Opel-Vauxhall was making steady progress towards sunlit uplands, with breakeven in 2011 and a nice little profit promised next year.

But Europe's sudden economic skid towards crisis has undermined prospects for car sales next year, and suddenly the forecasts are awash with red ink. The alarm bells are ringing and General Motors is parachuting Detroit heavy hitters into Opel headquarters in Germany to take control.

Now, experts are saying Opel-Vauxhall (Opel-badged cars sell across mainland Europe; the same cars with Vauxhall logos sell in Britain, its biggest European market) must slash costs again, shut factories and maybe reopen talks with the unions to cut wages. The sudden crisis has prompted the question of GM's intentions for Opel-Vauxhall, again, but the consensus is that it might be a chronic loss-maker, but GM isn't about to bail out. And because of Europe's economic malaise, the oft predicted car industry shakeout might finally be at hand, not surprising when everyone admits there is at least 30 percent overcapacity.

This seems a bit unfair on Opel-Vauxhall, which has made steady progress recently compared with its main competitors. This was not before time, given that it lost $14.5 billion since 1999, and saw market share in Europe gradually dissolve. In the first nine months of 2011, GM Europe's Opel, Vauxhall and Chevrolet subsidiaries increased market share to 8.7 percent from 8.5 percent in the same period of 2010, with sales 0.5 percent higher at 857,200, according to Automotive Industry Data (AID). Its main competitors in the European mass car market are Peugeot-Citroen and Renault of France, and Italy's Fiat. The French have seen sales dive more than seven percent in this period, while Fiat's sunk 11.6 percent. Ford Europe's sales slid 3.6 percent, according to AID.

Read more at the jump

From The Detroit News: http://detnews.com/article/20111125/OPINION03/111250399/GM-will-stick-with-European-operation--but-sharpen-scalpel-again#ixzz1gARfsA3h

http://detnews.com/article/20111125/OPINION03/111250399/1362/OPINION0339/GM+will+stick+with+European+operation++but+sharpen+scalpel+again

[Drew Dowdell]

But Europe's sudden economic skid towards crisis

It was only sudden if you weren't watching where it was going.

[Chicagoland]

How is 'Vauxhall' prononced phonetically? 'vox-all' or 'vo-hall'?

[CanadianBacon94]

How is 'Vauxhall' prononced phonetically? 'vox-all' or 'vo-hall'?

i just say it as its spelled Vox-Hall

[Camino LS6]

Opel = boat anchor.

[Robert Hall]

Opel = boat anchor.

Opel = Buick. Got to have Opel to provide Buick w/ models...

[Camino LS6]

Opel = boat anchor.

Opel = Buick. Got to have Opel to provide Buick w/ models...

Nah, that was only for a short time while US manufacturing was set up.

Opel is a cesspool of red ink in a dead market.

[Robert Hall]

Opel = boat anchor.

Opel = Buick. Got to have Opel to provide Buick w/ models...

Nah, that was only for a short time while US manufacturing was set up.

Opel is a cesspool of red ink in a dead market.

Well, the 2012/2013 Buick line will be 3/5th Opel-derived models..

[Camino LS6]

Opel derived is the key point. Production and subsequent export from Opel to the US is folly.

Europe is a disaster and will pull Opel down with it.

Time to cut those losses, I think.

[Robert Hall]

The question wrt Opel/Vauxhall in Europe is how is Chevrolet doing in those markets? Since replacing Daewoo in Europe and elsewhere, GM has been pushing Chevrolet to be the global brand (how Opel once was)....

GM globally is Chevrolet, with Buick, Opel/Vauxhall and Holden being the middle regional brands, and Cadillac at the top as a regional-trying-to-go-global brand...

Edited January 15, 2012 by Cubical-aka-Moltar

[Camino LS6]

The question wrt Opel/Vauxhall in Europe is how is Chevrolet doing in those markets? Since replacing Daewoo in Europe and elsewhere, GM has been pushing Chevrolet to be the global brand (how Opel once was)....

GM globally is Chevrolet, with Buick, Opel/Vauxhall and Holden being the middle regional brands, and Cadillac at the top as a regional-trying-to-go-global brand...

That's one question.

The thing is, it will take years (if not decades) for the convulsions in Europe to stop. So, that begs the question - can Opel weather such a long storm?

I very much doubt that in an environment of such extreme over-capacity and deep economic weakness.

Opel hasn't much of a chance, I think.

[David]

This would be the time for GM to cut bait and run. Use it to unload a ton of bad UNION privilages and focus on the global Chevy\Buick\Cadillac. Or outside of the US/China just go with Chevy as the entry to mid lux brand and Cadillac as the luxury brand.

Time I think to close the Opel\Voxhall to history books much like many other auto companies.

I think this would allow GM to shed a large amount of over capacity and clean up old debt and union dues and move forward with a global streamlined auto plan.

This is way over due and about time for a proper shake out of all auto companies.