By on February 15, 2017

Opel-Astra-295903

After yesterday’s shocking news of a potential takeover of GM-owned Opel and Vauxhall by France’s PSA Group, General Motors CEO Mary Barra hopped on a plane to the Fatherland.

Given the sudden uncertainty surrounding a major employer, Opel’s works council, labor union and the German government staged a collective panic attack. Soothing words were needed, stat. Britain, home of Opel’s Vauxhall sister division, would also like to hear a few assurances of its own.

According to Reuters, Barra appeared at Opel’s Rüsselsheim, Germany headquarters today. PSA CEO Carlos Tavares is reportedly planning a meeting with German officials, possibly including Chancellor Angela Merkel.

Yesterday’s freakout was not unwarranted. The GM-PSA discussions, now apparently at an advanced stage, were unknown to the German government and nearly the entirety of Opel’s workforce. Perturbed, the country’s economy minister called it “unacceptable” that it wasn’t informed of the high-level talks.

Rushing to get in front of the issue, the government is now in talks “at all levels” with GM, PSA and Opel, labor minister Andrea Nahles said today. Opel employs about 19,000 workers at three plants in that country, and the same amount at plants in Spain, Austria, Poland Hungary and the UK. Vauxhall employs around 4,500 workers in its two British plants.

Across the Channel, tensions are running high over the possibility of lost jobs. Britain’s Department for Business claims it is in close communication with GM over the issue, and Vauxhall’s labor boss wants a promise to preserve the brand’s workforce.

“I will also be seeking urgent conversations with the (UK) government because everything must be done to secure our world-class automotive industry,” Len McCluskey, head of the Unite union representing Vauxhall workers, told Automotive News Europe.

Despite its success in boosting revenues and streamlining operations at its domestic operation, GM hasn’t been able to bring its European divisions to profitability.

[Image: General Motors]

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29 Comments on “Mary Barra Tries to Calm German, British Fears after PSA-Opel Freakout...”


  • avatar
    threeer

    I have a soft spot in my heart for Opel. My father owned three (all different model years, but all three white, four-door Rekords). They weren’t fancy, but they served us well. I’d kind of hate to see it go to PSA, but guess that since I no longer reside in Germany, I really don’t have much of a dog in the fight…

  • avatar
    dash riprock

    The future of European automakers and their profitability, in western Europe especially, is really murky in the medium term in my view.

    There is a lot of government regulation that is poised to shift auto sales from ICE engines to EV’s etc. What will be the affect on manufacturers margins? Have not seen anything to suggest that they will see an increase in margins. It is a huge uncertainty. Shifts in consumer actions is one thing, change in regulatory regimes in another.

    Economic growth is not buoyant. The density of European countries also potentially lead to a quicker acceptance of ride sharing and future shared mobility initiatives. This can result in a smaller market for new vehicle sales.

    Ignoring pride and possible efficiency arguments, there is at face value some reason to understand that there may be some strong logic to this transaction.

    • 0 avatar
      RobertRyan

      @dash riprock
      In a word NO : Ride sharing? They have public transport everywhere.
      “There is a lot of government regulation that is poised to shift auto sales from ICE engines to EV’s etc. ”
      Again No, might be a big thing in NA, but not Europe
      “Economic growth is not buoyant.”
      Europe has been consistently growing since the GFC
      “This can result in a smaller market for new vehicle sales.”
      They sell many vehicles outside the EU

      • 0 avatar
        dash riprock

        Dig a little deeper. There are several governments that have put the industry on notice that the days of ICE are threatened. Why else would MB, VW, Ford, GM have plans to introduce dozens of new EV’s in short order(who is making money selling EV’s?). Why are auto manufacturers bypassing battery manufacturers to go directly to miners(including one in your Australia) to try and secure materials necessary for battery cells?

        Ride sharing is my thesis, it serves a different purpose and audience than public transportation.

        Opel does not sell many vehicles outside EU to my knowledge

  • avatar
    dougjp

    I see little problem anywhere in the EU if this sale goes through. The UK, with Brexit, that’s a different story. I doubt PSA would bother, and kill Vauxhall as the means to consolidate and save money.

  • avatar
    carguy

    No one should be surprised that GM is trying to unload Opel. Opel has been bleeding red ink for some time and is showing no signs of reversing that trend.

    However, if PSA can do any better with Opel remains to be seen.

  • avatar
    Tstag

    Given the UK government is worried that any factory closures will be blamed on Brexit then I expect the U.K. Government to put up some resistance to a shut down of U.K. plants. The may even decide to buy a stake in PSA if it comes to it…..

    Either that or pay JLR to take over the UK factories as they might be able to use the capacity.

  • avatar
    rentonben

    Sorry, everybody I think it’s me :(

    I bought an Oldsmobile and then GM killed Oldsmobile
    I bought a Saturn and then GM killed Saturn
    I bought an Opel-made Buick Regal…..

  • avatar
    01 Deville

    Question: How can Germany and UK compel GM to safeguard their interests?
    If GM is leaving the market they can’t tax or fine them.

    • 0 avatar
      Johnster

      While they can’t do much, if they gave GM any tax-breaks in the past, they might be able to claw some of the money back. It would be something, even if it is only a drop in the bucket.

  • avatar
    PrincipalDan

    In a world where Mercedes is building vehicles in Alabama and South Carolina, BMW building in South Carolina, and Volvo opening a factory in South Carolina – European operations is likely about the last place you want to be.

    Maybe GM is thinking “One GM” like the “One Ford”? Unload unprofitable divisions and sell similar cars worldwide.

  • avatar
    2manycars

    Considering what Germany put the world through I don’t see much reason to worry about their concerns. (Then again, with apologies to Tom Lehrer, we taught them a lesson in 1918 and they’ve hardly bothered us since then.)

  • avatar
    stingray65

    The problem with a PSA-Opel/Vauxhall combination is that none of the brands have any cachet in Europe or around the world. BMW, Audi, and M-B all outsell Opel in Germany and many other Euro-markets, and the only market where PSA is sorta strong is France. They all have relatively high cost structure/manufacturing bases, and sell on price, so it is hard to imagine how two weak partners can ever be profitable.

  • avatar

    It now looks as if this plan is dead in the water. I think Merkel would go as far as to start a trade war with the US over this plan. Oh well, Opel is back in the GM fold.

  • avatar
    tomLU86

    I guess I don’t understand what all the fuss is about.

    If PSA, or anyone, bought Opel, I’m sure they would inherit the same arrangements GM had.

    PSA is part owned by the French govt. France and Germany are the core of the EU (which has rewarded German industry at the expense of everyone else, especially southern Europe, which is shackled by the Euro and forced to buy German goods).

    I’m surprised GM would consider it–but if PSA made the first move, why not?

    PSA may see value in the vaunted German industrial enterprise called Opel that GM can’t seem to tap into.

    As an American, I find it quite depressing to drive an Astra diesel RENTAL for a week on vacation in Europe, and then look forward to driving a new Cruze hatchback, an LT mind you, only to be disappointed by how poorly it compared to the Opel version of the same car.

    If GM can’t/won’t give us Americans the benefit of having Opel, and if Opel loses hundreds of millions year after year, give it to the French.

    How having a French owner is worse than a US owner for Opel and the Germans, I do not understand.

    • 0 avatar
      28-Cars-Later

      The British, Germans, and French all have a passive aggressive hatred toward each other for reasons I can’t quite understand.

      • 0 avatar
        dal20402

        Maybe that they were trying to kill and/or conquer each other for most of a millennium, and only stopped relatively recently?

        • 0 avatar
          28-Cars-Later

          I think its more than that, I think it also has to do with cultures/languages. I’d also point out the French have not tried to kill/conquer neither the British nor Germans for some time, although certainly the World Wars and British pre-war economic hostility toward the German Empire should be noted.

          • 0 avatar
            NoGoYo

            But Germany started both World Wars though.

            Imagine if Germany had kept up its anti-imperialist stance instead of the Kaiser firing Bismarck and going on a land-grabbing campaign, there probably wouldn’t have been a WWI.

          • 0 avatar
            28-Cars-Later

            The First World War was much more complicated than one might think, it was in the works for many years prior. I can’t find the Churchill letters to quote but here is a brief reference to what I am talking about when I say British aggression:

            “Germany had started a naval arms race with Britain.

            Imperialist competition between the two states over markets and resources preceded the arms race in the fifteen years before the war. Britain’s naval power was the vital element in its ability to restrict German access to markets and resources across the world. Unless Britain was willing to allow Germany to expand economically, the logic of capitalist competition meant that Germany was bound to challenge British naval supremacy. The latent violence of the leading imperial nation is always the context for aggressive challenges to the status quo on the part of rising powers.”

            http://www.counterfire.org/history/17511-ten-lies-told-about-world-war-i

            The German Empire after the 1871 unification was slowly becoming a major economic power, and in the late 19th Century the Kaiser set about building a grand navy. This threatened the British Empire both militarily (in terms of warships) and economically (The Royal Navy more or less controlled the world’s sea lanes, and the UK was a major economic power out of the Industrial Revolution). This was also complicated by the development of a new naval weapon concept, the Dreadnought, in 1905, and the rout of the antiquated Imperial Russian Navy at Battle of Tsushima in 1904. There are letters which bear out the threat posed by the Germans in the early 1900s but as I said I can’t quite source them at the moment. The war also had several other major factors and intended outcomes, I encourage you to do your own research, including what is beyond common knowledge – history is a set of lies agreed upon.

            https://en.wikipedia.org/wiki/HMS_Dreadnought_(1906)
            https://en.wikipedia.org/wiki/Battle_of_Tsushima

            The Second World War was technically initiated by ultimatum after the German invasion of Poland (the latter of which had defense treaties with the West). Important to note the West did not declare hostilities with the Soviet Union after it participated in the invasion and partition of Poland on 9/17/39. Same as before, history is a set of lies agreed upon.

            https://en.wikipedia.org/wiki/Declarations_of_war_during_World_War_II

            One final thought: all war is a profit center for certain groups (bankers, arms developers, mfgs, war suppliers). There is a basic concept in finance, one man’s debt is another man’s asset.

          • 0 avatar
            NoGoYo

            War is always good business.

            I can imagine the Great Depression wouldn’t have been so quickly and thoroughly reversed if we hadn’t had to start making tanks and planes by the thousands and munitions by the millions.

          • 0 avatar
            28-Cars-Later

            Keep digging.

            “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

            https://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/

            The fix was in for nearly the entire Twentieth Century, only a few things seemed to not be taken into account.

  • avatar
    samuelmorse

    Unfortunately, there are not top executives with strategic vision and sound international experience in GM today. If Opel has been losing money consecutively for eighteen years, what they need to do is to find a strong and seasoned leader to fix it rather than resorting to the easiest solution of selling out their problem. Exiting a huge market as Europe has an almost impossible turning back and probably a negative fallout in other regions where GM is present today, specially those which rely upon Opel technical support.


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