By on November 11, 2009

Interesting strategy...

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.

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5 Comments on “GM: Opel Can Be Independent But Not Global...”


  • avatar
    Mullholland

    Korean Chevrolets Uber alles! Remember, there is no brand but the bowtie. What worked for Saturn, Pontiac, Hummer and Saab will certainly be in the best interests of Opel.

    • 0 avatar
      psarhjinian

      That’s probably very true.  The introduction of Chevrolet-née-Daewoo  to Europe was the first nail in the coffin of Opel, and I’m surprised that there weren’t more red flags raised at the time.
       
      This actually works out reasonably well for GM: they can string Opel along for a bit to avoid a backlash, perhaps sneaking in a Daewoo here and there (eg, like the Antara and the new Astra) until, eventually, Opel to Daewoo/Chevy what Buick is in North America.
       
      They’ll have to bring the Chevrolet-woos’ marketshare up, of course—which won’t happen—but you can be assured that the plan as it went over in the boardroom, was to squash Opel (who’s always been too autonomous for it’s own good) and replace it with lower-cost cars that GM would like to see.

  • avatar
    Bunter1

    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

  • avatar
    Steven02

    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.

    • 0 avatar
      Mullholland

      … 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.

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