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Opel Takes Over GM Europe Operations

New change brings focus on entry-level small cars.

by on Jul.22, 2014

GM folded its European operations in the newly branded Opel Group as part of its plans to return to profitability.

General Motors plans to make its European operations profitable are taking shape as the automaker has rebranded its European unit as the Opel Group and a renewed its focus on small, profitable cars.

The re-branding took effect July 1. The new organization is based in Rüsselsheim, Germany, and will also oversee Chevrolet’s operations in Russia and Cadillac in Europe.

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“Today, we are more than just Opel/Vauxhall,” Karl-Thomas Neumann, CEO of the management board of Opel Group, said in a statement. “With the Opel Group, we align our organizational and legal entity structure in Europe with the business operations. (more…)

GM Pulls Opel Out of China; Will Play Larger Role in U.S.

New move in global brand realignment.

by on Mar.31, 2014

The Opel Adam S is not going to be available in China as GM is pulling the brand out of the country.

As part of a continuing global brand realignment, General Motors has pulled Opel out of China. The move comes barely a month after the Chevrolet brand was yanked out of Opel’s home market in Europe.

German-based Opel has been struggling to gain traction in China since entering the market there two decades ago. Even though GM is the second-largest manufacturer in the Chinese market – generating 3.16 million sales in 2013 – Opel’s 22 dealers sold a mere 4,365 vehicles there last year.

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But Opel won’t vanish entirely. Its product engineering operations will continue to assist in the development of new products for China – as well as for the U.S., Opel announcing it will produce a new model for Buick that will be exported to the States later this decade. (more…)

GM Investing $5.2 bil in Opel Turnaround

"Opel is key to our access," asserts CEO Akerson.

by on Apr.10, 2013

Opel continues to struggle for a turnaround.

General Motors plans to pump €4 billion into its struggling Opel subsidiary over the next three years in a bid to finally reverse 13 years of losses that have led some skeptics to call on the American maker to sell or shutter the German-based operation.

The move, worth $5.2 billion, approved by the GM board on Wednesday, is meant to show that Opel has the maker’s “full support,” declared Chairman and CEO Dan Akerson, who emphasized his belief that “Opel is a key to our success.”

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Following a meeting of the GM board at Opel headquarters in Russelsheim, Akerson declined to provide details of what the money will be used for, though the German subsidiary has been racing to streamline its bloated operations even while adding an array of new products such as the Opel Adam and Mokka models that have been among its few recent successes.


Union Pay Freeze Could Be Crucial for GM Europe

Workers trade wages for job guarantees.

by on Mar.01, 2013

GM is counting on new products like this Opel Adam -- and cost-cutting -- to help it reverse 13 years of European losses.

IG Metall, the powerful German metalworkers union, has agreed to a pay freeze for 20,000 union members employed by Adam AG Opel, General Motors’ principal European subsidiary. The move could be a critical next in the long-sought turnaround plan for GM which has suffered 13 years of worsening losses in Europe.

In exchange for the pay freeze, the automaker has agreed to hold off on layoffs and will continue operating a plant in Bochum, Germany that was slated to close permanently.

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German pay increases, put on hold in November as part of the negotiation process, will be postponed through 2015, the Ruesselsheim-based unit said in a statement today. GM will refrain from forced firings through 2016 as part of the deal, according to a statement posted on the German union’s web site.


GM Snatches New European Chief from VW

Neumann will be pressed to pick up the pace of cuts.

by on Feb.01, 2013

New GM Europe chief Karl-Thomas Neumann.

General Motors has recruited a former Volkswagen executive to run its beleaguered European operations, which have fallen ever deeper into the red for 13 consecutive years.

Karl-Thomas Neumann was named president of GM Europe, chairman of the management board of GM’s Germany-based Adam Opel AG and GM vice president. He was most recently CEO of Volkswagen’s flourishing China division.

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The 51-year-old industry veteran will be given the unenviable task of righting an operation that has run up billions of dollars in losses and largely squandered its once solid reputation in Germany and the rest of the European market. GM has confirmed it will have lost as much as $1.8 billion in Europe once final numbers are tallied for 2012.


Key Analyst Wants GM to Dump Opel

Opel is not for sale, responds GM CEO.

by on Jan.16, 2013

Opel is betting models like the new Adam can help turn things around -- along with job and plant cuts.

General Motors would be further ahead if walked away from its ownership of Adam Opel AG even it had to pay another automaker to take it off its hands, said one of the auto industry’s most influential analysts.

Adam Jonas, a managing director of Morgan Stanley, told the Automotive News World Congress the value of GM’s shares could increase by as much as 50% if it unloaded its ailing European business – something the maker has so far refused to consider.

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The fact is the efforts to turn around Opel have been slow, painful and expensive and nowhere near complete, said Jonas. Meanwhile, Opel has piled up $17 billion in losses since 1999. GM Chairman Dan Akerson has said he doesn’t expect GM to become profitable in Europe for another three years despite its latest turnaround plan’s draconian measures.


GM Europe Won’t Break Even Until Mid-Decade

Further plant closings possible.

by on Nov.01, 2012

GM Vice Chairman Steve Girsky leads a new team trying to right the maker's European ship.

Despite an intense turnaround effort that will include plant closings, job cuts, a management shake-up – and a flood of new product – General Motors doesn’t expect its hemorrhaging European operations to be back in the black until mid-decade, according to the executive overseeing that rescue effort.

In the near-term, losses are continuing to mount, $478 million for the third quarter, and the maker upping the projected deficit for all of 2012 to somewhere between $1.5 billion and $1.8 billion. GM Europe has consistently run in the red since 1999, total losses now expected to top $17 billion by year-end.

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But the picture isn’t entirely bleak. GM’s German-based Opel subsidiary has received strongly positive reviews – and a flurry of orders – for new products such as the compact Mokka crossover and Adam minicar, and GM Europe actually going into the black from a cashflow basis for the July – September quarter.

That was “a positive step in this difficult environment for a company that hasn’t had much positive news” in recent years, suggested Steve Girsky, the former Wall Street automotive analyst who now serves as GM Vice Chairman – and who was put in charge of the European turnaround early this year.


Analysts Call on GM to Dump Opel

“Find a new home” for faltering brand.

by on Sep.06, 2012

GM CEO Dan Akerson is coming under increasing pressure to fix -- or dump -- Opel.

General Motors Chairman and CEO Dan Akerson recently let his guard down for a brief moment, hinting GM made a mistake by not selling off its Opel brand back in 2009, shortly after the U.S. giant emerged from bankruptcy.

Apparently, a growing list of analysts and other observers would agree, warning that the U.S. maker simply won’t be able to stop the hemorrhaging of the German-based Opel which is now heading for a 13th year of red ink.

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“One of the worst things in the auto industry is owning a cash-burning, resource-consuming business,” warns Adam Jonas, lead auto analyst for Morgan Stanley, who has now downgraded GM shares to “overweight,” largely due to the continuing problems the maker has in Europe. “We believe the time has come for GM to find a new home for Opel.”


Opel Slashes Work Hours at 2 Key Plants

Bigger reorganization in the works.

by on Aug.24, 2012

Opel continues to flounder as sales plunge.

With its sales down 15% for the year and the situation likely to get worse, General Motors’ floundering Opel brand will slash production at two of its key German plants.

Several thousand workers will be idled for at least 20 days through the end of the year, the maker announced after reaching an agreement with its union, the powerful IG Metall.  The move is likely the first in a series of steps that Opel will take as it heads towards a broader reorganization being crafted by GM Vice Chairman Steve Girsky, who was named interim chief of European operations earlier in the year.

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The European automobile market is declining dramatically,” Opel’s head of personnel, Holger Kimmes, said in a statement explaining the company’s need to slash production.

GM lost $747 million last year on its European operations and Opel was a primary factor in a 40% slide in the maker’s second-quarter 2012 profits.  In all, Europe is expected to run up losses of as much as $2 billion for GM for all of 2012.


GM Readying Another Major Reorganization

Insiders brace but many hope for the best.

by on Aug.22, 2012

GM CEO Akerson tis expected to soon launch a major corporate reorganization.

General Motors appears to be heading towards a major reorganization, numerous sources indicate, one that Chairman and CEO Dan Akerson apparently hopes will shift the maker to a more global focus – and help it eliminate the sort of “fiefdoms” that have long stymied its efforts to become more efficient and competitive.

GM has been taking a number of baby steps towards this new vision in recent months, such as a realignment of its design operations meant to focus more on individual brands than specific global regions.  But the strategy has also suffered some unexpected setbacks, notably including the sudden ouster of worldwide marketing chief Joel Ewanick last month.

A reorganization could yield huge benefits if it results in a leaner and more efficient GM.  And CEO Akerson is clearly under pressure to improve things at a company that suffered a major drop in earnings during the second quarter – and which has seen its stock drop by as much as 40% since its November 2010 IPO.

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On the other hand, some observers caution that after years of turmoil, capped by the maker’s 2009 bankruptcy and subsequent federal bailout, GM’s leaders could trip the company into chaos if they’re not careful. The massive and largely dysfunctional 1984 reorganization is a clear example of what could go wrong.