Multiple media sources are reporting that an acquisition of General Motors’ European divisions by France’s PSA Group could occur within a matter of days.
Talks between GM and PSA, maker of the Peugeot, Citroën and DS brands, are reportedly at an “advanced stage.” If finalized, the deal would see GM shed the money-losing divisions it has owned for nearly a century.
Speaking to Germany’s Handelsblatt earlier this morning, a spokesperson for Peugeot claimed that the talks did not concern an expanded partnership, but rather an outright acquisition of GM’s German and British subsidiaries.
GM purchased Vauxhall in 1925 and Opel in 1929. Product alignment between Detroit and Europe tightened in past years as GM adopted global architecture. The next-generation Buick Regal, based on the Opel Insignia, is expected to be built in Germany. How the potential sale will affect products like the Regal remains to be seen.
While the two brands give GM a strong presence in Europe, Opel and Vauxhall have kneecapped GM’s finances year after year. Last profitable in 1999, the two brands were expected to turn a profit in 2016. What actually occurred was a $257 million loss.
Attributing factors included Britain’s decision to leave the European Union, which depressed the UK’s currency. PSA, on the other hand, is surging after years of decline. The French automaker, buoyed by a government bailout, has an aggressive plan to boost profits and increase its share of the European market.
Handing over a majority stake in the two companies would wrestle GM free of the financial burden. It would also make PSA the continent’s second-largest automaker, holding 16 percent of the European market, reports Bloomberg. PSA shares climbed following the news.
GM sold its 7-percent stake in PSA in 2013, though the two companies continue to share production of SUVs and minivans.
In a statement, the American automaker downplayed expectations:
PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.
There can be no assurance that an agreement will be reached.
[Image: General Motors]
Who’s gonna style the Buicks now?
The French will now style and engineer GM cars. GM now admits the French make better cars. This is a new low for the American auto industry.
The problem for the French is that Europeans, like Americans, want what they consider to be better: German cars.
But not Opels. BMW, Merc, Audi.
SAIC-GM
This. North American Buicks will cross the Pacific to get here.
Tomifobia,
GMH would be an ideal place to start for future Buick design.
@Big Al from Oz
Opel, will still be doing a lot of the design work. As I posted else where, it will be hard for the new ” Holden Commodore” to emerge, or be updated based on a AWD Opel
The Chinese, duh!
But if they sell Opel where will they get new Saturns from?
I wish we could get new Saturns. I bought an ’02 Vue (first year) that had one of the most reliable drivetrains I’d ever driven. With a 2-stage sport manual transmission, I put over 130,000 miles on the original clutch plates. Not only that, but the Vue gave me almost 32mpg on the highway when everything else was lucky to push 28mpg.
Me too! We still have one – an ’04 Saturn Vue V6 AWD. We’ve enjoyed 110,000 trouble-free miles with it. The 250 HP Honda V6 was strong for its time. My wife refuses to let me sell it!
Just about all of GM’s midsized cars are engineered by Opel. This means every midsized GM car will now primarily be a French engineered car. Maybe the French are just better at producing cars.
Without Opel GM could conceivably fall to fourth place in international sales. They are now easy pickings for Ford. GM seems less concerned with market share lately.
You’re assuming GM will buy from PSA. Why?
He doesn’t understand the article.
Much GM hate do I sense in this young padawan.
The chief says “it is good to hate GM my son, they urinate on our landscape.”
GM is already effectively in fourth, now that Nissan/Renault has absorbed Mitsubishi.
Good now they can shoot for fifth. If you are going to suck do it convincingly.
Having the highest world market share is only relevant if you care about the size of your e-peen. GM should be focusing on building the best cars they can while making as much money as they can. Who cares if Ford/Toyota/VW/whoever technically sells more cars. Blindly focusing on market share above all else is typically how you end up in the toilet with terrible product(s) (not unique to the auto industry).
Doesn’t it also determine your costs to a large extent? Being able to spread development and factory costs over a larger run must be a good thing I would expect.
whynot,
What you state is half true.
You must also protect yourself like any investment strategy. Hedge.
Putting your eggs in a very limited number of baskets reduces the protection of your investment.
GM needs different markets to carry the load when areas of your investment are not performing.
So, what is GM’s strategy when the ass falls out of the US market?
akear,
A larger issue is GM will far more reliant on full size US vehicles.
GM total sales won’t fall – they’ll replace the Opel sales by way of a merger with FCA – but only if Sergio isn’t part of the deal. That can be arranged, as long as the Agnellis can walk away with cash.
The plus for GM is of course Jeep, but the additional truck sales from Ram will help vault past Ford,, and mostly American production facilities to curry favor with Trump.
Then GM can sell off the European and Brazilian Fiat business, and maybe Alfa, to Volkswagen, and use Fiat facilities elsewhere to boost GM foreign sales.
The sale of Opel and merger with FCA could be profitable, if Fiat/Alfa can be sold, and GM would end up trading European facilities that lose money for American facilities that make money.
While I doubt such a merger would (or should) ever happen; I salivate over the thought of a Wrangler with a GM V8 under its hood.
@akear,
It already is, Nissan will overtake them..GM retreating as a Global company and becoming a NA only one.
This will probably lead to some dull cars for Buick. Guess we better prepare for more mid-2000s-era Lucerne and Lacrosse models. Maybe the next Enclave will look like the Rendezvous.
GM should make an immediate move to hire Opel’s design teams.
Pssst the Enclave had nothing to do with Opel….neither does the Lacrosse neither car is sold by Opel nor do they have Opel equivalents.
Pssst… Opel Mokka.
Pssst…the Mokka is the Encore, not the Enclave.
Pssst… I hate Buick’s naming structure!
That’s not a Buick.
A renault encore?? :-)
Dang it – I meant Encore.
Either way, the point was the Buick design team was churning out unappealing designs before we started getting rebadged Opels.
Au contraire mon frère.
Opel designed and engineered the platforms that the current Enclave and that the and future Enclave will be based on, as well as the platform that the previous 2nd generation and current 3rd generation Buick LaCrosse is based on.
As I mentioned above GMH has a great design centre.
They will depend more and more on GM Korea for small and midsize cars, it has worked for the Volt/Cruze.
Why not just hire American designers and engineers. They are doing a good job at Telsa and Toyota.
GM simply sucks. I cannot wait until Ford passes them in markeshare. GM has basically handed Ford third place in world wide markeshare. It is hard to believe GM was the world’s top carmaker for 90 years, now they are in danger of slipping to fourth.
That’s funny – I feel that way about Ford! Can’t stand any of their products. Not one of them feel right, but GM products do for me.
At any moment I will be banned from TTAC by a Baruth brother. And yes, I know that Bark supposedly left.
There is nothing wrong in hating GM and Ford together. It is now your patriotic duty to hate GM.
Say hi to Billy F!
@akear
Ford is currently ranked 7th Globally, behind Hyundai- Kia
Geeze, you guys can’t help yourselves.
GM admits American cars are crap.
Buicks will be French from now on.
Is it fun to jump to conclusions and pull facts out of your a§§?
Yes, and yes.
The French always insisted they made better cars than the Americans.
Now I can’t get Holy Grail Cleese out of my brain.
Your mother was a hamster and your father smelt of elderberries!
Wife & I just re-watched that couple nights ago. Oh, God… never grows stale.
“…and I faht in your general direction! Now, go away you silly English k-niggit…or I shall taunt you a second time!”
And the Americans insist they make better than everyone else. Silly comment.
That is not true. Americans spent a lot of time complaining how bad their cars are to Consumer Reports.
akear,
Go to France and they complain as well.
Ah yes, the LeCar, Flaming Fuego, Renault Appliance and Encore… So many hits, so much junk!
No Kidding. GM is selling Opel, not a joint venture.
I am making no attempts to be a GM apologist, but it seems like a few on here, no matter what transpires in the news with GM the shark gets jumped rather quickly to some bizarre set of ‘alternative facts’.
As stated their European unit has been a cash burn for decades. This is long over due and only strengthens the company long term, which is good for the U.S. It is refreshing to see them fully abandon the stupidity of trying to be the top seller of vehicles world wide.
Did they make some bad cars in the past, yup. So has everyone else. Talk to my neighbor who has a V6 auto accord, on its 3rd transmission and a BMW 3 Series, which they switched to searching for a quality car that will spend less time in the shop. Go figure.
Today the French auto industry stepped on the American industry.
This fits into Trumps ‘Murica first position.
TROLL…
Cardesigner,
It was a tongue in cheek remark.
87Morgan,
From what I’ve read PSA put out this idea, not GM.
It will be interesting to hear from GM.
BAFO; according to the article by Reuters on Autonews.com yesterday, the sale of Opel was initiated by Mary Barra.
I grant that misinformation may be at play here, but I suspect that GM has had enough of the red ink in Europe.
That is if they are interested in making Buicks, probably not
What is included with the sale? Are we talking the plants, or the intellectual property? I’m sure there’s some engineering tech PSA would love to get its’ hands on.
“an aggressive plan to boost profits and increase its share of the European market”
Ah. Riot vehicles.
Maybe Oshkosh Corp can get a piece of that, too.
Or a variety of cars from the A to D segments, plus van variants and one or two SUVs. Frankly the US seems to be just as atavistic anyway.
“Frankly the US seems to be just as atavistic anyway.”
Only our bad people are atavists who smash stuff and poop on sidewalks!
That, to me, is a very serious mistake; some of GM’s best vehicles have run Opel drivetrains and even been little more than badge-engineered Opels. The stuff designed here in the States has been far worse in many cases.
I now see another bankruptcy for GM in the near future–possibly in as little as five years.
So, you predict GM will fold 4 years after FCA?
It’s the Jeep curse. Whoever owns “Jeep” goes bankrupt.
I could see FCA replacing GM if they continue to grow sales as they are. Chrysler/Dodge may be an issue but Jeep and Ram are moving up fast.
@Vulpine
Let us hope Pickups are not a fad. Otherwise it is Bankruptcy Mark 2 . At least historic nameplates of Opel and Vauxhall are in safe hands.
Pickups are a fad–for now. I expect we’ll see some common sense enter the buying market before long, especially if fuel prices rise again.
On the other hand, I’m seeing a LOT of reports that nearly everybody is going electric, at which point the playing field is very likely to be leveled as everybody will be working in start-up mode to create distinctive cars and just slightly less worried about super-aerodynamic bodies. I expect trucks to become more reasonable as well as the OEMs won’t be upsizing just to dodge CAFE limits any more.
A merger of equals.
I see nothing good to come of this but then there was nothing good there anyway.
I wonder how this plays in markets which use rebadged Opel cars as GM product?
Not a merger.
“… rebadged Opel cars as GM product”
Opel is a GM product equal to Chevrolet, Buick and Cadillac.
@TonyJZX
New ” Holden Commodore”
I’m not sure what GM is thinking with this. Not when Opel is the one designing the Buicks that are so popular with the Chinese.
They are thinking that the Chinese can design their own Buicks.
The problem is the Chinese are worse than the Americans when it comes to designing cars.
GM sucks mule balls. Before I trade my GM car in I will let my neighbors dog urinate on it.
Yes, but they have also let Daewoo and GM Korea design Buicks for the Chinese.
Honestly, what car is being threatened? The Regal? OK. The Verano/Excelle? Already dead. Lacrosse? The big sedan didn’t come from Europe. Everything else is either Korean or a US vehicle.
You’ve forgot the Cascada.
So has everyone else.
Zing!
SAIC-GM and GM Korea will now assume their positions as GM’s passenger car development & platform leads, with GM’s US engineering divisions doing the truck and performance categories. This probably makes sense for GM, should they see there is no real way to make money in Europe anymore. They will do a good job disguising this on their US market Chevrolet’s, but just look where the majority of their investment has been in new design and engineering capabilities over the past 20 years and there is your answer. Your Chinese cars will come courtesy of GM (they already do–Envision).
The problem is GM’s Korean subsidiary produce rubbish cars. How you driven a sonic.
I have driven a Sonic. I’ve also driven a Spark. Both are solid. What’s your issue?
I had a Sonic. While developed in Korea, many of the engineers came from Opel and that car, like the Cruze was full of Opel bits.
What’s frightening is in the history of Daewoo Motors/GM Korea, they’ve almost always gotten help from Opel one way or the other. I doubt they can do what they do without Opel’s help.
akear,
Are you stating that the Sonic is rubbish because you don’t like small cars? I’m asking because most of the time, when people dis a small car, it’s because they prefer bigger cars.
Now, if what you meant is ‘the Sonic is junk compared to similar cars like the Micra,’ then no prob.
I think his issue with the Sonic is that it isn’t that paragon of reliability known as the Fiesta.
Daewoo cars are simply below average. It shows how low GM set the bar when they chose Daewoo to engineer their small cars in the first place.
Dae – poo.
Uh, Daewoo hasn’t existed for something like a decade now.
Except in the minds of those people who are determined to slag GM every chance possible.
NN, why waste First World resources and talent on sedans?
Let the Chinese and Europeans have them.
this is apparently GM’s train of thought, and it probably makes short-term business sense. At this point Opel seems to have been nearly completely hollowed out; I’m sure GM has decided that GM Korea and SAIC are now up to par on engineering and design capabilities, otherwise they wouldn’t be so willing to sell.
That said, Europe is a 20 million unit annual car market, and with Chevrolet out of Europe, and Opel/Vauxhall going, GM is completely ceding the market. They will no longer challenge VW and Toyota for world’s largest car maker.
American business is unfortunately based on short term thinking. That is why the nation is in decline. With the exception of aerospace and computers the US has fallen behind the rest of the world. Heck, the US is no longer able to send a human into orbit. I guess even aerospace is in decline.
We are half the nation we were in 1970.
I just want to see America able to accomplish things again. All the US seems to do today is outsource innovation. Why can’t we have a competitive passenger train and auto industry.
akear, BLS data shows that US manufacturing output (in constant dollars) has virtually doubled since NAFTA was signed, and has gone up every year since 2009.
And as I pointed out to TheDoctorIsOut, the new economy is dominated by US-based companies. In technology, the US is hyper-competitive.
A century ago, technology wiped out millions of jobs in agriculture, and more than replaced those with new jobs in manufacturing. In this century, technology has wiped out millions of low-skilled jobs in manufacturing, and more than replaced those with new jobs on IT and other services – jobs that typically require more and different skills than the manufacturing jobs they replaced. It’s not decline, it’s evolution.
@ect,
Please stop with the facts and data. People just want to bitch about not making $100K a year with a grade 10 education. Alternative facts rule!!!
I think this is almost exactly the point. GM is looking to Asia for future product inspiration, whether that’s South Korea or China, to design and source its smaller cars. After shuttering Holden manufacturing and before that, Pontiac, SAAB, and Hummer this move shouldn’t be such a surprise. This is not the dominant GM of old anymore and hasn’t been since the 1970’s, this instead is a brand that now produces few products of relevance and shrinking appeal to world and domestic buyers. Not only do I believe this is not the end of the corporate shrinkage I’ll go as far and predict the demise of GM maybe as soon as 10 or 15 years from now with maybe only Buick surviving as a Chinese vassal.
That’s a bit far-fetched. The pick-up market alone is enough to keep GM going.
Years after spinning of its Nobel Prize winning R&D organization, its consumer sales and manufacturing divisions, AT&T was a former telecom behemoth but now it’s just a rebrand name for the former SBC that acquired its name and what was left of the enterprise telecom market.
“There’s More For Your Life At Sears,” was more than a slogan 30 years ago it was still America’s go-to for every consumer product. Now that they have spun off Craftsman tool all they have left is appliance sales as a crown jewel, and now they are on Wall Street’s death watch.
When I started the informal slogan for data operations was “No one ever got fired for buying IBM.” They now are little more than a consultantcy and integrator operation with most of their employees overseas.
Howard Johnson’s. Polaroid. Montgomery Wards. International Harvester. All major players in their fields had their day, all gone. Dominant brands can and will disappear.
Say “luxury car” to any Gen X’er or Millenial and they don’t think “Cadillac” and they certainly don’t think “Chevrolet” when discussing family cars. They and Buick will be the next spin offs as GM’s board tries to save their collective azzes to please what stockholders they have left and yes, probably the pickups will be the last to go but when that market goes away as they inevitably do, GM will be gone make no mistake about it.
TheDoctorIsOut,
With respect, your laundry list of “failed” US behemoths reflects an economy that no longer exists.
If we look at the new economy, some of the companies that dominate it include Google, Apple, Intel, Amazon, Facebook, Microsoft, Twitter, HP – all of which are US-based.
As you point out, “dominant brands can and will disappear”. Fortunately, there are new brands coming up behind.
“Howard Johnson’s. Polaroid. Montgomery Wards. International Harvester. All major players in their fields had their day, all gone. Dominant brands can and will disappear.”
I believe the term is creative destruction. FWIW, International still makes trucks, but it was never a major player in the automotive field. IH pickups and SUV sales were an asterisk compared to even Jeep. Montgomery Wards always played second fiddle to Sears. Howard Johnson’s growth was closely tied to the development of the national highway system but as travel habits changed, having a string of motels along the interstate highways wasn’t as important as having nice places in destinations like Orlando, or catering to business travelers. Polaroid was a well known brand but it was really never more than a niche in the camera market. Speaking of cameras, you could have added Kodak to that list. The company invented digital photography and failed to see its potential.
@TheDoctorIsOut
International Harvester has become part of Fiat and now has been absorbed by IVECO their Truck Division
Good Dr, you forgot another US institution that is no longer…BlackBerry.
Once the leader in ‘smart’ phone technology.
What your list proves is the old adage ‘Just because you are on the right track, does not mean you can’t get run over’. The companies listed failed to shift/innovate with consumer taste and/or markets.
BlackBerry, formerly known as Research in Motion, LTD was Canadian.
Not to pile on, but nor did AT&T fail as T.D.I.O. implies. It broke up in the face of antitrust action. The former SBC (the former Southwestern Bell) was a Baby Bell (i.e., part of pre-break-up AT&T). Portions of pre-break-up AT&T have faded away, but much of it is thriving. It’s hardly a good example of a failed company.
AT&T, when facing an antitrust investigation along with IBM at the time, believed they both were going to lose their cases, AT&T thinking the future was in hardware (read: computing) and long distance service and agreed to spin off the local operating companies to try and save itself. Once mangement believed it couldn’t complete in hardware AT&T progressively entered other businesses, spun off others and later, the acquisitions (Lucent Technologies, cable TV, and the first AT&T Wireless operation, formerly Cingular) to protect the long distance business not realizing that was becoming a commodity business. In other words they got out of every business that had a future to protect the only that didn’t, and when there wasn’t anything left to blame for their downward spiral they sold what was left to SBC. They failed, no question about it.
So GM will sell off its last engineers, and focus even more on marketing gimmicks and trucks with outdated technology?
That is what GM does best.
So does that mean that the Insignia wagon/Buick Tour-X won’t happen? That’s not very nice if so.
Do you remember captive imports? It could work that way, although it’s more likely those cars will now come from Chinese GM factories.
I making this prediction now. By 2022 Ford will pass GM in international market share. By ditching Opel, GM will lose over a million in vehicle sales. Hmm, It we are talking about vehicles in the millions maybe GM will lose to Ford overnight. It is hard to believe GM is going to drop to fourth place.
Here is an appropriate GM catch Phrase.
“From first to fourth in a decade”
Mary Barra is just a better looking version of Roger Smith.
I’ll bet, by 2022, that GM will have cut a 1/4 billion in annual financial losses thanks to ditching loser Opel.
Are you for some reason still bitter about the loss of Oldsmobile, Pontiac, and Saturn? Why should GM keep building cars that it can’t sell?
“Are you for some reason still bitter about the loss of Oldsmobile, Pontiac, and Saturn? Why should GM keep building cars that it can’t sell?”
Yes. Because GM ruined the cars and made them undesirable rather than keeping them as uniquely-individual brands. GM killed the cars long before they killed the brands.
I owned both a Pontiac and a Saturn, so I feel the loss. But there’s way too much competition from foreign makes these days. It makes no sense to invest the resources into creating four different mid-sized sedans, four different compacts, mid- and large-sized SUVs, an extra minivan or two…
It’s not as if a modern Grand Am or Alero would make the current mid-size platform a winner against the Accord/Camry/Fusion/etc.
I wish the US could have an auto industry to be proud of like the Germans and Japanese do. I am tired of being ashamed and embarrassed by our execrable auto industry.
akear,
How do you expect the US auto industry to be like EU, Japanese, Korean, etc manufacturers?
The US refuses to become a part of the global vehicle alliance. This was designed to allow many nations to trade with each other using common regulations.
I have mentioned this many times.
As the world globalises more and more and other nations become more affluent the US market becomes less significant.
Its just maths …. until the end.
On the other hand, a modern Cutlass Supreme or even the 2-2/2-door (Two and two halves) Saturn Ion would be more unique than any current Chevy sedan.
Self reporting data. Do you work for Ford?
akear,
Maybe GM wants to concentrate where the future lies. The Chinese market.
Invest a dollar in the Chinese market and return a dollar and a quarter or invest a dollar in the EU and get 90c.
The Chinese market is closer to what the US market is.
But, will this occur, or is this false news. How bad is the EU market? Have a look at Renaults recent earnings.
The Chinese value bling and bullsh!t over performance, similar to the US.
@akear,
Internationally GM is currently 3rd with Nissan about to leap frog it, Ford is 7 th
Say whaaaat?
It is a f**king nightmare.
I admit I checked the calendar to be sure it wasn’t April 1st instead of Valentines Day.
GM’s valentine to zee Germans.
Fun Facts:
http://www.infoplease.com/spot/valentinesdayhistory.html
This actually surprises me quite a lot, because unless I’m missing something, this is GM basically walking away from the European market. They tried to launch Chevy maybe 7-10 years back and shut that down I believe. Cadillac sells a couple cars, as does Corvette. And I do mean “a couple” is there anything else if there is no Opel/Vauxhaull?
I get it, why keep throwing good money after bad. But I’m surprised such a large automaker would just walk away. But hey, PSA will be huge and don’t sell in North America so I guess GM won’t be alone.
This also could say very bad things about the EU economy. I know some companies like Unilever or P&G have moved a lot of their EU products into emerging market products, basically saying in places like Greece, Spain, Portugal, Italy, the economic conditions are so depressed they can’t purchase their mid-level stuff.
So maybe GM has lost money, can’t turn it around, and their number crunchers see Europe as AT BEST holding water, at worse, a place where new car sales are bound to tank, and then look that the cash and using the money spent on Opel can be better used to grow business in parts of the world that will matter to their bottom line.
Will say I find it somewhat refreshing GM might actually be doing this from a culture perspective. This is the kinda thing old GM would NEVER have done. Would have burned cash trying to get market share. We will see if good business move or not, but the fact they even considered this, and let alone will probably go through, is a huge change from GM’s MO for what, 50 years?
Sorry long post.
“Sorry long post.”
Not at all. You’ve conveyed the gist.
Further involvement in Europe is like trying to grow big ticket consumer markets in the Mahgreb.
You’re right on Opel never cutting a profit, but Opel is a major R&D center for what’s left of GM. Unless somehow you are going to retain your talent and simply be offloading your production capacity, real estate, debt, product rights etc this does not seem wise.
Perhaps GM is frontrunning the breakup of the EU and selling to a player who won’t be leaving the continent in the aftermath?
Even if the EU broke up (which it probably won’t, at least the core states) there will still be a vehicle market. GM sold cars in Europe before the EU even existed. Pulling out of a whole continent based on something that hasn’t happened yet and may never happen makes no sense. Even if they bet correctly, it would out of pure dumb luck.
I doubt that the EU’s climate has much to do with it.
Barra is trying to improve margins. Whatever happens with Opel-Vauxhall, the goal would be to improve margins by reducing or eliminating activities that don’t produce margin.
In the big picture, the problem is that Opel never followed the other German automakers in turning Opel into a high-margin brand that could sell the world on its Teutonic heritage. Instead of becoming GM’s version of the Ultimate Driving Machine or whatever, it has been a bit of a joke.
This is similar to the problems that the Old GM had in the US: Lots of volume, but no pricing power. They may have concluded that it’s too late.
On the other hand, I find it hard to believe that GM is just punting completely. My guess is that there may be some sort of other arrangement in the works that isn’t quite an outright selloff.
“Barra is trying to improve margins. Whatever happens with Opel-Vauxhall, the goal would be to improve margins by reducing or eliminating activities that don’t produce margin.”
If that’s true, then expect GM to sell nothing but trucks and sports cars in the future; trucks give huge margins in huge numbers and sports cars give huge margins in tiny numbers. Even their crossovers are going to fade away at the rate they’re going now.
This only goes to prove that GM has lost what made it great in the first place–it’s ability to make cars people WANT. They’ve relied on “focus groups” so long that they’ve gone from the major leagues into the junior leagues; they’re not even a “feeder team” any more. They make mistake after mistake after mistake and honestly don’t understand why they continue to lose money. As some would put it, GM has lost their Mojo. Maybe it’s time for Elon Musk to buy GM; he’d most certainly change how the company is operating and it could only be for the better.
Other Euro makers ended up with low priced brands mfred in E. Europe to deal with the shopper who can’t afford the flagship brand – Skoda, Dacia, etc. GM has neither plants nor brands in the East, just high labor cost UK and German operations.
As societies get more polarized between winners and losers, there’s less room for middle class brands. Macy’s is getting pounded but Wal-Mart and Neiman-Marcus are doing OK – you either go high or go low, whereas Opel/Vauxhall are stuck in the middle.
2015-04-09: “Two Millionth Vehicle Leaves Opel Plant in Gliwice (Poland): The jubilee car is a Holden Cascada cabrio for the Australian market”
(http://media.opel.com/media/intl/en/opel/news.detail.html/content/Pages/news/intl/en/2015/opel/04-09-two-millions-vehicles-gliwice.html)
They say, the plant was a reward for Poland partaking in the American wars.
The wife was casting an eye at the Cascada as a replacement for her ’06 Solara; I kind of doubt the Cascada (or upcoming nice-looking Insignia Wagon) will survive the transition.
As a fan of Fords, European Fords in particular, a sale of Opel/Vauxhall to PSA would finally determine who won the eternal Ford vs. GM battle. However, this has the same feeling to me as if my candidate for President won by default because their opponent committed suicide. Nothing to celebrate about.
I doubt GM will buy anything from PSA. That leaves GM Korea, SAIC, Detroit and the skeleton team at Holden (to the usual trans-Tasman suspects, face it, Holden isn’t going to save the day) to lead future non-Cadillac passenger car development. Detroit did a fine job making the Alpha/Sigma vehicles and Holden with the Zetas, but none of them have any skill at developing a FWD car, and anything they did do was with the help of Opel.
If GM is going to do this, use the money to do one of the following, buy Mazda (which I have been saying for five years) or take a stake in Honda because none of their remaining divisions have developed a competitive FWD car. Losing Opel sounds like a penny-wise, pound-foolish move.
“If GM is going to do this, use the money to do one of the following, buy Mazda or take a stake in Honda because none of their remaining divisions have developed a competitive FWD car. Losing Opel sounds like a penny-wise, pound-foolish move.”
Mazda is still in just a little too tight with Ford, so is an unlikely partner. Honda, despite their own in-house reliability, practically murdered any GM vehicle their drivetrains carried. In all honesty, GM has been killing itself since the early ’90s and made a fatal mistake by killing off not just one, not just two but THREE marques that carried a remarkably loyal owner base. Those owners didn’t buy more GMs after their brands were shut down; they went to off-shore brands that had little, if any, connection to GM. I’m one of those former GM owners and now I buy FCA because I simply don’t like a single model GM offers and don’t trust GM to remain loyal to its customers. This sale of Opel is just another example of that lack of commitment.
“Mazda is still in just a little too tight with Ford…”
Uh, since when?
Mazda was last seen cozying up to Toyota. (Yaris iA anyone?)
Toyota is going to turn into GM if they keep this up with Subaru, Mazda and Suzuki. None of those companies have anything Toyota can’t do by themselves, but unfortunately, Toyota is too timid to do on their own.
The worst thing is GM could have very well created Japanese General Motors by just buying Suzuki, Subaru and Isuzu outright and having a full line of small and midsize cars with trucks.
Is this 2007?
In my limited knowledge of the European car market, I remember Opel and Vauxhall are pretty big players there, even if they are losing money. Surrendering that much market share seems like a bad idea, even under the current circumstances.
Re: buying stake in Honda or fully buying Mazda. I can’t see Honda accepting that kind of offer as they’re proudly independent. That said, stranger things have happened. As a Mazda fan, it would be very sad day if they accepted an offer from GM. They haven’t historically treated their acquisitions very well and tend to run them into the ground.
Here’s an idea – instead of abandoning Europe, figure out a way to sell cars profitably there. If they’ve been losing money in Europe for almost 20 years, whose fault is that? Other people make money selling cars in Europe. Why can’t GM? You are talking about abandoning one of the top 3 market regions in the world. When an automaker throws in the towel on a major region, it is not a sign of strength to say the least.
Classic GM – Can’t compete?
Give UP!
*barnyard animals hurtling downward*
RUN AWAY!
Does the Colobus Monkey count as a barnyard animal?
I dinnae ken whit ye mean.
I think we switched from “Holy Grail” to “Brave.”
“The witch g’ve me a gamy spell.”
Aye, the haggis is in the fire for sure. I kenna change the laws of physics!
I am glad our generals in WW2 did not have that attitude. The America today is more interested in profits than actually being competitive. When you even lose to the French then you know something is wrong. Actually, I knew GM was in trouble when they thought Daewoo designed better small cars. If the bar is set that low you won’t be able to beat anyone.
GM is like a 6-10 football team that is deluded into believing they are super bowl champs.
1. Opel and Vauxhall were profitable in 1999. No business keeps loss making units that long. Could not have done it sooner.
2. GM America’s chassis engineering is as good as any European maker. ATS/STS and CT6 are were all engineering in US. Magneto rheological shocks were innovated here as well.
3. Design is increasingly global and even in Europe Im sure GM is already transferring outstanding talent to the units they are keeping, all transnationals do that.
4. Opel and Vauxhal were unable to compete with Ford and VW, in Europe, let alone MB and BMW.
5. If GM wants to be in Europe, a receding and not very lucrative market, they can re-introduce Chevrolet, which was beginning to come in its own when the plug was pulled.
“Magneto rheological shocks were innovated here as well.”
America makes best potassium. All other producers make inferior potassium.
Not apples to apples. I used the fact that we commercialized this technology before anyone else was in support of the argument that American Chassis design is competent with the rest of the world, not to insinuate that none else can do it.
“4. Opel and Vauxhal were unable to compete with Ford and VW, in Europe, let alone MB and BMW.”
— Who cares about competing with Ford and VW in Europe; they can’t even compete with FCA in Europe any more. But that’s more because FCA is offering cars people want to buy while GM/Opel can’t even figure out how to build anything with identity. They’re so generic I’m almost surprised they’re not using black & white logos to go with their monochromatic bodies.
“FCA is offering cars people want to buy”
200 reasons to doubt that Dart about in my noggin.
The people who actually OWN Darts tend to like them. It’s the people who chose to rely on obsolete reputations that chose not to buy.
Dammit, I clean forgot you’re on my protected species list.
Apologies and I shall severely fine myself.
I’m sorry sir, but your card has been declined.
Vulpine,
Like Darts? Wow.
You do use alternative facts to build many stories.
Keep writing.
@Vulpine
“It’s the people who chose to rely on obsolete reputations that chose not to buy (Darts).”
I can’t decide if this is a troll attempt or not.
No, the Dart didn’t suck, as long as you didn’t drive it back to back with something like a Golf. Or a Civic. Or a Mazda 3. Or a Focus. Or the Jetta I ended up buying.
Problem is, people who “don’t rely on obsolete reputations” are people like me, who approach car buying with an open mind. Unfortunately, folks like me drove pretty much everything in this class, and the Dart. And they found the Dart to be about 61.4% baked, and passed on it, like I did.
The Dart needed to be superior to overcome Dodge’s “obsolete reputation,” and it was merely competent. That’s why it failed.
Or were you trolling here?
@FM: Not trolling, stating facts as I know them. I’ve talked to several FCA Dodge Dart owners and they actually do like them. No, they weren’t intended to be the fastest cars on the road, they were intended to be economical and reasonably practical (for a sedan) and somewhat fun. They were certainly no worse than the Neon, which itself was relatively panned yet surprisingly popular. The issue for the Dart was that the very first one was forced to try for a 40mpg economy rating, which killed something like 50% of its performance. The reviews highlighted this and set the reputation for the whole line that was flat undeserved–just like the current reputation for the Fiat 500 itself is flat undeserved. I’m not saying they were perfect–or anywhere near perfect–but they certainly weren’t (aren’t) as bad as non-owners want to believe.
Remember, I went into test driving a Fiat 500 because I, too, believed that reputation. After driving it I was shocked at its driving dynamics–quicker and more agile than I expected–and drove it for two years and 17,000 miles with no issues whatsoever. It was a blast to drive and averaged over 30mpg in daily driving while exceeding 40mpg on the highway. That proved to me that Fiat/FCA’s reputation is undeserved and the fact that FCA products are growing in both US and global markets proves they’re not as bad as SOME want them to be.
Yeah, and my wife is one of them. And her Dart has been a damned good car. If this is what a failure looks like, I can’t even visualize what a success would be.
“(In the 2016 Consumer Reports owner satisfaction survey), four Fiat Chrysler Automobiles vehicles were found to be the least-satisfying models in their segments: The Jeep Compass (small SUV), Dodge Dart (small car), Chrysler 200 (midsized sedan) and the Dodge Grand Caravan (minivan).”
http://www.autonews.com/article/20161222/RETAIL03/161229935/tesla-dominates-owner-satisfaction-survey-consumer-reports-says
TTAC needs to have some sort of special icon to highlight any truthful, accurate statement made by Vulpine. (No need for the tech guys to rush — this icon will never be used.)
I’m not sure anybody would be satisfied knowing they purchased the cheapest, most obsolete car in its segment. It’s not exactly a boost to one’s self-image.
I wonder what the satisfaction rating is for FCA cars that aren’t bought out of desperation.
It’s a pity you included the argument AGAINST your point in your comment.
01 De Ville,
The US is a poor designer of anything other than fullsize pickups.
There is a sprinkling of vehicles that the US has manufacturered that are okay.
The EU, Japanese, even Australians design a better chassis.
Even pickup design in the US is being challenged, with other BOF designs.
The US design is out of date, searching for volume over substance.
Whilst the US has this approach it will not lead in vehicle design.
Even HDT design is better outside of the US.
GM will focus on China, another consumeristic driven auto market.
Big Al from OZ,
Design as a whole is hard to track and was not the point of the post. My argument is that GM can manage without Opel for chassis design.
Overall design is managed globally and there are probably enough talent overall in GM to be fine, yet management at GM is hardly known for utilizing that talent.
01 De Ville,
Its the US market, not GM. The US market has been about buttons and bling over chassis.
PSA initiated this with no word from GM.
If this did occur, I think GM has given up on running a business in the EU.
But then again, look at PSA performance over the past decade, or Renault. They are out performing the US major manufacturers.
The US needs to realise over 80% of the global economy is not the US. They might realise this but are poorer at managing this. VW has a small showing in the US market, yet it is the largest vehicle manufacturer.
FCA is in dire straits. It needs global business, especially China. FCA can only build large unefficient vehicles (relies on).
I think now the GFC’s dust is settling you will see some more rationalisation in the industry, especially the EU. The EU has way too much production capacity.
I think 01 Deville has a point. GM has always had very good engineers, who have come up with many creative design solutions that worked very well. The biggest problem, in my opinion, was integrating that good engineering with cost accounting and vehicle design. GM has taken a good idea and half-baked it, cost-cut it, or neglected it way too many times.
SP,
GM has played and continued to play the regional game more than others.
GMs competition generally have a true global identity.
One step down from GM is how Chrysler unsuccessfully played the global market, then AMC was another step lower.
You can see Ford with its identity has proved more successful.
From a design perspective I don’t think GM is any better or worse than the competition. Look at FCA or even Ford.
Maybe the NA model of manufacturing along with regulatory controls can take some accountability.
Cadillac is the one bright spot. It shows that US engineering can take on the world’s best. Of course, Barra will probably screw that up too and break up Cadillac. She has turned out to be a Wall Street drone interested only in profits and little in innovation.
akear,
You can design and build a better video format, ie, Beta. VHS stole the show.
The consumer obviously consider Caddy in a different light than you.
The Chinese desire Cadillacs, and they bought 170,000 last year to prove.
If Trump doesn’t fnck it up this is good. Buick is a better proposition.
But there is much competition in China from EU and Japanese manufacturers.
Zhongguoren bu hen cōngmíng.
Smart move. Market share is meaningless if it comes at a continuous loss. Actually, market share is meaningless in general. All I care about as a shareholder is growth and dividends… neither of which are wholly dependent on market share.
And akear, if the French are so great at building cars, why is the French auto industry in its death throes? (Rhetorical question, the answer is self evident)
But soft! ‘Tis not easy being European today.
I’d be really surprised if GM moves ahead thus giving up its share of the European car market. But they have proved in the past than can be able to complete the most dumb moves one could think of.
PSA should build into the deal the right to distribute through Buick dealerships, should they ever decide to sell in North America. Wouldn’t that be a smart move?
Not for Buick. NA market has outwordly expectations of longevity, reliability and tolerance of abuse.
It’s interesting that virtually all of the comments focus on the impact of this deal (if it is a deal) on GM, and nobody is asking if PSA should be wanting it.
GM Europe loses money, does not apparently offer any compelling product and has no unique market position or value proposition. If PSA buy it, they acquire 2 additional brands they’ll need to support, which can only dilute their marketing efforts, some factories they’d probably rather not have and a distribution network to support.
The most likely outcome is the Opel and Vauxhall will gradually slide into oblivion, which will be something of a gift to Renault, VW and Ford. PSA shareholders will be asking why management ever foisted this deal on them in the first place.
“It’s interesting that virtually all of the comments focus on the impact of this deal (if it is a deal) on GM, and nobody is asking if PSA should be wanting it.” …
An interesting point, to be sure. However, if you look at PSA’s native products one of the first things you’ll notice is their sense of identity; they aren’t just generic bubble cars, they have a uniqueness of style that says, “I am Peugeot,” and “I am Citroën.” Even Ford’s cars uniquely say, “I am Ford.” What is Opel? Their design says… “I am Generic.” It used to be that Opel was quite distinctive. Not any more.
What sold better, Vulpine – the “generic” Cruze or Malibu, or the “distinctive” Dart or 200?
Could the reason why a “generic” Cruze actually impressed a potential owner is that it didn’t sound like a lawnmower when you started it up, like the Dart 2.4 I drove did?
Which was inhibited by an undeserved reputation? That should answer your question.
“Which was inhibited by an undeserved reputation? That should answer your question.”
The Cruze was inhibited by the Cavalier when it was first introduced but managed to overcome that reputation by it own merits. What’s the Darts excuse?
You raise a very good point. Non negatives (maybe positives, not sure) of Vauxhaul/Opel are engineering focused on reliability, market share in UK and Germany and capacity.
Maybe french will manage these better than Americans.
ect: I have hard time believing this will happen. If it does, however, I think your conclusion is the correct one.
ect,
Opel and Vauxhall are finding it awkward to rationalise as quickly as the French manufacturers had done. Hence Renault and PSA have been performing well.
If I were the PSA boss (Tavares) cutting this deal a big part of it would be plant closures.
This will make “GM EU” profitable.
Is this false news? It seems a rather harsh move on GM’s part.
So how much will it cost GM to buy the fantastic EU tech it needs? $300 million a year.
GM still needs the technology from the EU.
Not a problem, just put Buick badges on Chevys.
Better still, Buick seems to do better in China than the US.
Let the Chinese design Buicks ……. until Trump fncks it all up.
Feels like GM is turning itself into the Chrysler of 10 years ago. No European arm and reliant on US (and Chinese) sales.
What is Barra’s hat size. You need to send her the golden dunce cap.
You’ve been very busy here. Teachers’ Meeting today?
You work for GM. You can’t fool this master troll.
This doesn’t make a lot of sense to me.
I can see why GM would be ready to do this deal, they get out of some horribly expensive labor cost areas that have been dragging down the brands for a while now. But, with the retreat of Chevrolet, they largely abandon European sales.
What does PSA and their Chinese ally get from this? PSA already sells in the same market as Opel and Vauxhall. Why would they want their Western European facilities? You can’t fire anyone in Germany without a huge severance, IIRC, the other Euro (Euro=unit of currency) nations are similar. Could the Chinese be actually interested in Opel, instead?
PSA and Opel already cooperate on cargo and passenger vans. In fact the whole European van market is an incestuous relationship between all of the manufacturers on the Continent. But what would dull as dishwater (or so we’re told) Opel have that PSA couldn’t conjure up on it’s own?
GM Europe holds all of the IP for the cars there. I seriously doubt that GM would let go of that kind of thing, although they did promise whomever took Saab that they could get the IP for that then-current Saab. Of course, it was already being succeeded by a new chassis, so no great loss.
Like others noted, all transnationals send their engineers here and there. There’s nothing that says a Korean or Malaysian or Swedish engineer couldn’t figure out how to make a F-150 if they are given the proper information going in. I wouldn’t go as far as saying all engineers are interchangeable, but engineering is a science. Anyone with the proper training can participate.
For GM the advantages seem to be this: Getting rid of a money losing drag on the company’s performance. Getting out of a mature market, but also losing the liabilities of producing there. The drawback seems to be a loss of sales and market share in Europe. I don’t know if that would be a deal breaker for them.
For PSA the advantages are? Duplicate facilities in areas of the world where it’s very difficult to divest themselves of excess capacity? Taking on the legacy costs of supporting older products? Possibly gaining market share?
I don’t see it.
The biggest problem, if this eventuates is the rationalisation of PSA and EU GM plants and what countries take the biggest hit.
Brexit does come into play. The Germans will get the better deal.
GM/Opel is about to become as popular in Europe as American football. Both football and Opel failed in Europe due to low interest.
I am sure Opel’s German employees are thrilled with the prospect of working for the French.
akear,
Nations across the globe are littered with multinationals.
Who gives a fnck who is paying your wage?
What nonsense.
What’s the betting that FCA and PSA follow this up and merge?
GM will need to think about how to rebuild in Europe. A great buy would be JLR but I don’t think TATA would sell
I think some one stated the Sonic is rubbish because…it is.
Flabby seats, ridiculous gauges, dumb door handle in C-pillar on the hatchback, miniature rear window…
It’s not a bad driving car (not great either), but some many details are sooo wrong…
I think the German govt is behind this…give Opel to the French to help VW.
I’m glad I got my Buick Regal/Opel Insignia while I could.
Mildly overpriced, but it drives REALLY well, costs a LOT less than a FWD/AWD Audi, and even Consumer Reports likes it.
If Opel is folded into Peugeot, GM might cut it’s losses in Europe, but GM’s US car offerings will suffer without some Opel influence to mitigate the American and Korean designers.
With the exception of aerospace the US is losing it ability to design products. The US has designed and engineered some great cars in the past maybe they should be given a chance again. Even today there are quite a few impressive US designed cars.
I had been wondering when GM will go full Isuzu and become a truck only maker, considering that 90% of its profit come from full size trucks (and truck based SUV). This seem like a logical first step.
Granted, knowing GM they will most likely ask too much for Opel/Vauxhall, and the deal will fall through.
This strikes me as a accounting decision. Engineering and sales were out voted. It also reminds me of their brief ownership of Lotus. Accounting saw that they were spending more money with Lotus for engineering than the company was worth. So they bought them. Then as they started to invest into the car business they realized why it was valued so low. It took them 7 years to change their minds. We have seen this before with other large manufactures as they expand their “empires” then later decide to concentrate on their “core values.”
Whatever. Dust off the tooling for the B and H body.
That ship’s sailed, padre.