GM to retain Opel – what a foul play!
What long looked like a neverending story got an unexpected turn. GM tonight decided to keep Opel.
GM who first played the poor victim of economic downturn and a US auto market that got ever tougher and who addressed governments for financial aid in order to maintain thousands of jobs now showed its real face. Among the wide range of similar brands of inferior quality, Opel can truly be called the most promising of all GM brands. For months, the German government has been working hard to support Opel and to navigate the corporation towards what seemed to be the most promising of buyers: Magna together with Sberbank. This may not have been the ideal result but at least it saved Opel and thus German engineering from Chinese copy methods. Now what? Time will tell. By keeping Opel GM maintains access to European-standard automobile technology and the production lines for small vehicles which may become one of the fastest growing automobile segments in the U.S. – given that gas prices will not fall to levels before 2006.
How can GM all of a sudden afford to keep Opel? According to GM auto sales in October have risen by 4 per cent compared to the previous year which was mostly due to the core brands Chevrolet, Cadillac, GMC and Buick.
German politicians and managers alike are very displeased about the game GM has been playing for several months.
I seriously wonder if the brand Opel and the the German Chevrolet models will not be negatively affected by this strategy. There is a latent threat that the strong sympathy and support which Opel has been experiencing in the last months may turn by 180°. Opel could be perceived to be less German and more capitalistic and greedy, sokaing up German taxpayer money…
Curious about what is to come….
One day has gone since GM announced to keep Opel. As expected, German government representatives are „pissed“, European Opel employees scared about the future, and Magna angry about this sudden change of plan. Many wonder how GM plans to manage the restructuring of Opel, what will happen to the European factories and whether GM will make its statements true and lay off some 10,000 employees. Experts expect that GM will increase pressure on the current European factories and try to play them off against each other in the struggle for survival.
I am skeptical about whether GMs strategy has a long-term perspective. They are running risk of pissing off European consumers, auto unions and European governments. How then do you want to increase sales in Europe? And how will rival automakers react to this move? Ford is already ahead of competition in the U.S. and by introducing more and more European technology in the U.S. and by focusing on efficiency instead of pure power and size their head start may manifest.