GM: Opel Can Be Independent But Not Global

Edward Niedermeyer
by Edward Niedermeyer

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.

Edward Niedermeyer
Edward Niedermeyer

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  • Bunter1 Bunter1 on Nov 11, 2009

    I can easily believe that our boy Fritz thinks 3B will do the job that others think will take closer to 9B. This is how they have built their successful run for the last three decades-why stop now? I don't think the decision to keep Opel will mean much, perhaps it will change the type of failure mode they experience, and scoot some of my taxes to Deutschland, but the end will be much the same for GM and Opel. Bunter

  • Steven02 Steven02 on Nov 11, 2009

    Eastern Europe vs. Western Europe. Opel is big in Western Europe. Chevy will make progress in Eastern Europe. Opel is above Chevy, much like Buick is. They are not competing with each other. Opel's vision of independence as far an IPO is never going to happen. Employee ownership probably won't happen either. Leadership independence and their own decision making should happen. Opel makes great products. These products are going to be a big step in the right direction for GM.

    • Mullholland Mullholland on Nov 11, 2009

      ... And when these wonderful Opel products are ready, GM will sell them as Chevrolets. Even in the US, as Buick will be gone. Yet another casualty of GM's pig-headed/misdirected brand marketing, 40 years running.

  • Honda1 Unions were needed back in the early days, not needed know. There are plenty of rules and regulations and government agencies that keep companies in line. It's just a money grad and nothing more. Fain is a punk!
  • 1995 SC If the necessary number of employees vote to unionize then yes, they should be unionized. That's how it works.
  • Sobhuza Trooper That Dave Thomas fella sounds like the kind of twit who is oh-so-quick to tell us how easy and fun the bus is for any and all of your personal transportation needs. The time to get to and from the bus stop is never a concern. The time waiting for the bus is never a concern. The time waiting for a connection (if there is one) is never a concern. The weather is never a concern. Whatever you might be carrying or intend to purchase is never a concern. Nope, Boo Cars! Yeah Buses! Buses rule!Needless to say, these twits don't actual take the damn bus.
  • MaintenanceCosts Nobody here seems to acknowledge that there are multiple use cases for cars.Some people spend all their time driving all over the country and need every mile and minute of time savings. ICE cars are better for them right now.Some people only drive locally and fly when they travel. For them, there's probably a range number that works, and they don't really need more. For the uses for which we use our EV, that would be around 150 miles. The other thing about a low range requirement is it can make 120V charging viable. If you don't drive more than an average of about 40 miles/day, you can probably get enough electrons through a wall outlet. We spent over two years charging our Bolt only through 120V, while our house was getting rebuilt, and never had an issue.Those are extremes. There are all sorts of use cases in between, which probably represent the majority of drivers. For some users, what's needed is more range. But I think for most users, what's needed is better charging. Retrofit apartment garages like Tim's with 240V outlets at every spot. Install more L3 chargers in supermarket parking lots and alongside gas stations. Make chargers that work like Tesla Superchargers as ubiquitous as gas stations, and EV charging will not be an issue for most users.
  • MaintenanceCosts I don't have an opinion on whether any one plant unionizing is the right answer, but the employees sure need to have the right to organize. Unions or the credible threat of unionization are the only thing, history has proven, that can keep employers honest. Without it, we've seen over and over, the employers have complete power over the workers and feel free to exploit the workers however they see fit. (And don't tell me "oh, the workers can just leave" - in an oligopolistic industry, working conditions quickly converge, and there's not another employer right around the corner.)