While GM bleeds cash at home, its overseas business continues to fare pretty well. Auto Motor und Sport reports that GM's European Opel division posted a record 572k sales in the first quarter of this year, earning a pre-tax profit of $198m. Although profit is its own reward (and apparently an actual priority for GM), GM is rewarding its German branch with a $9b investment over the next five years. $2.5b of the cash will go towards renovating Opel factories in Rüsselsheim, Kaiserslautern, Bochum und Eisenach. The remaining $6.5b will help Opel bring 17 new passenger cars (and three new commercial vehicles) to market by 2012. And now the bad news: Opel's European market share declined from 9.7 to 9.6 percent. Opel GM-Europe boss Carl-Peter Forster says never mind, pointing to hbis employer's 11.6 percent Russian market, where car sales jumped by 78 percent in the first quarter. "Russia will be Europe's largest car market by next year at the latest," says Forster. With Opel providing several of GM's most popular U.S. products (Saturn Astra and Vue), GM's investment could well keep the sinking ship afloat for an extra quarter or so. Just kidding. On both counts.
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GM shout out to K-Town! Go Red Devils!
I wonder if GM is structured such that the US branch can be taken in Chapter 11 or 7 without affecting the other portions of the empire?
Hmmm….what about Vauxhall? Will the plant in Ellesmere Port receiving any funding? Or will they shut it down. Just because they have the contract to make the 2010 Astra, doesn’t mean a thing.
Ford PROMISED Dagenham the new Fiesta contract…….then went back on their promise and shut Dagenham assembly down.
Sammy,
I’m sitting here staring at my Red Devils sticker on my desk! Parents have lived just outside of K-town for the last 16 years, and I go back just about every year! Rote Teufels rule (well, not really…they’re at the bottom of the 2nd League standings).
Anywho…always hoped Opel would get the mad props. I grew up on Opels, as that’s about all my dad would buy. Always…always…a white four-door Rekord (before they phased the Rekords out, that is). I’m quietly hoping that the Astra finds it’s voice here in America. Saw 240+ kp/h in a sweet Vectra GT-S about two years ago motoring along the A-8 heading to Stuttgart. I’ve always thought of Opels as the solid, working-class car for the German Volk and hope they continue to see more success.
I would have thought Ellesmere was doomed in the medium term. Hard to see the UK gaining significant new investment as the centre of gravity of the European car industry shifts East.
Politically it seems much easier to shut a plant in the UK than anywhere else.
Much like the N. American shift to manufacturing in Mexico, the EU is seeing a shift to the cheaper labor in the former soviet states. I see no reason to think that the future will hold anything other than more movement towards lowering labor costs.
And cheaper materials I might add, which invariably is the way to lower quality. And this is for ALL auto manufacturers :-(
jthorner : I wonder if GM is structured such that the US branch can be taken in Chapter 11 or 7 without affecting the other portions of the empire?
I think with the new bankruptcy laws in 2005, companies can no longer separate foriegn operations in bankruptcy. Delphi was able to do this because they filed before the laws took affect. Someone correct me if I am wrong.