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