Will GM Follow Through With Opel Divestiture?
What Will GM Do With Opel?
The news coming out of Detroit from GM headquarters has been rather confusing of late. Besides its impending bankruptcy and likely divestiture of Saturn, Hummer and Saab, we now know that GM is looking to sell off Opel too. Or at least a large stake in its German division.
This information is curious as GM has controlled Opel since 1929, holding onto the operation through the worst depression and war of the past century. We only learned late last week that GM was considering not only selling a stake in Opel, but perhaps ceding majority ownership in this vital division. Opel represents the automaker’s most important face across the European continent (coupled with its British Vauxhall brand) as it sells more GM cars than Chevrolet and Cadillac combined.
Possible Sale Of One Or More Plants
General Motors hasn’t given any indication that buyers are interested in Opel. The automaker is negotiating to sell one or more of the brand’s assembly plants while talking with several European governments about taking a stake in Opel.
Likely, this would mean that any country who has an Opel manufacturing plant would be asked to contribute funds to prop up Opel, receiving a share in the newly separated entity in exchange.
Opel May Run Out Of Cash In April
GM is making it known that without some sort of government intervention, Opel will run out of money sometime in early April. 25,000 Opel jobs are at stake with perhaps eight to ten times that number whose livelihood depends on the brand. Should Opel fold, Germany and several other countries would have a crisis on their hands, one that could reverberate through the entire European car industry.
Perhaps what will ultimately define Opel’s future is how GM will handle its impending bankruptcy in the United States. If the automaker opts for a structured bankruptcy, then they’ll quickly divest itself of excess capacity, brands, and people in a bid to fix itself. At the same time, GM will likely make a case for other governments to get involved, particularly where the company has a significant manufacturing presence.
As of right now, no one can say what GM plans to do with Opel (and Vauxhall) as their future depends on what steps GM will take over the next few days. If the US federal government decides to give the automaker billions more money, then the crisis will be delayed by weeks, but not averted entirely.
I am a Vauxhall independent specialist in the uk. I only work on vauxhall/opel cars, if they go under so do I. I am very worried about this.
Eddie, I understand your concern. In Europe, GM’s situation is a bit different as they attempt to separate Opel/Vauxhall from the company and run it independently. To do this they need massive government funding, much as have been getting here in the US.
The next several months will be a critical time for GM. If the industry continues to sink, I don’t know how they’ll pull out of it. But, if things stabilize then their financial position should improve or at least the bleeding will have been slowed down.
The auto industry in Europe is already having a tough enough time without loosing more jobs from a giant manufacturer like Vauxhall/Opel. Lets hope someone steps in before another car manufacturer disappears and thousands of jobs along with it.
I am so worried about this crisis. I live here in Europe and I am so anxious of the situation. Although i am in the financial sector i am so worried that the market gets saturated with other laid off jobs.