GM: Opel Can Be Independent But Not Global

GM CEO Fritz Henderson’s promises of independence for Opel made the right noises, but they carefully avoided any discussion of the actual role GM envisions for its German division within its global strategy. The latest updates seem to indicate that GM will keep Opel for its engineering expertise, but that the brand will be subordinate to Chevy’s global ambitions. Henderson delivers the slapdown [via Reuters]:

Opel is a regional brand and I don’t see that changing. That doesn’t mean I’m closed to ideas about how it can be used elsewhere; but the measure of the Opel brand’s success will be Europe, because if you don’t win here all the discussion of exports will be irrelevant

Not that GM even gives Opel its full support currently in the European market. Just a week ago, Chevrolet’s brand manager announced that the bow-tie brand would seek to double its sales in Europe to 1m units. Keeping Opel in a single region where it will be competing with another GM brand’s growth ambitions seems like a funny way to rescue a division. But it might also explain why Henderson laughed down the Moody’s estimate that retooling Opel will cost on the order of $8.5b. Chuckled Fritz:

I have absolutely no idea where those numbers came from. That’s not what we think is required — we think what’s required is about 3 billion euros in total

It seems that GM, lacking the money to seriously rescue Opel, is settling for a semi-rescue. Chevrolet-badged Daewoos will continue to make up the bulk of GM’s global sales strategy, while Opel will primarily engineer higher-end architectures and vehicles for mature markets and luxury brands like Buick. That is, as long as Opel’s workers play ball and the engineers keep developing the platforms and technologies that mad Opel too valuable for GM to let go of. But the signs from GM are that they want to keep Opel around on strictly on the cheap. Henderson has said that $1b per year could be spent keeping Opel’s models and engines modern, but he warned that this was a forecast, “not a promise.”

Ultimately, the ball is in GM’s court. Henderson has promised Opel’s stakeholders a complete business plan to guide the division through 2014, but the divide between the two sides seems vast. With GM seeing a limited, Europe-only role for Opel, while its employees dream of partial ownership, independence and someday, and IPO, there seems little doubt that the drama will continue unabated.