Too Much Capacity, Too Little Sales, Too Late For Opel?

"Europe in America was for me a disastrous experience." Not all European vehicles sent to America were disastrous. There are those who have owned or currently own a Mercedes, BMW, Audi or Porsche product that are/continue to be repeat customers. Opel, like GM, is, was and always will be a disaster. And while it can be argued endlessly how great the massive bailouts, handouts and nationalization were for the UAW/CAW/Euro-unions, GM, its subdivisions and affiliates, the big losers were all the tax payers, regardless of nationality, who were left holding the bag and who will come up with the big goose-egg when all the crying is done and the fat lady has sung. There is no way to resurrect GM or Opel from the dead. The better way would be to liquidate the whole lot or chop it up and divvy it out to whomever wants to own a piece of that antique action.

@highdesertcat "There is no way to resurrect GM or Opel from the dead." GM is doing ok - although they need to cut Opel capacity. There's too much capacity all over the EU - and it's likely to get worse if there's further meltdowns in the periphery countries. But that's also a PR opportunity: Potential riots, bombings, and fleeing economic refugees from fiscally degenerate countries like Greece can deflect attention from a sub-standard car company's plant closings and layoffs.

@highdesertcat GM will survive in the short term but Opel is and has been in trouble for some time. GM for whatever reason was desperate to keep their stake in Opel after the bailout, and stomachs the continued losses, and for what? The R&D is the only benefit I see, if you haven't noticed Buick has literally becoming Opel US with its offerings and Cadillac consists of Opel car designs with some SUV's thrown in. Its a sick dependency on an ailing German automaker, and although I think GM wants to keep Opel alive, their trade unions flipped at the idea of plant closures and will make things difficult to do so... the irony is thick since the UAW arguably had a serious hand in GM's bankruptcy in the first place. The way I see it in the short term is Europe is collapsing, and governments or unions alike won't care much for lob losses. Perhaps figure out where the car growth is (South America? India? China?) and retool some of those factories to build cars targeted at those markets, branded Opel or something else. In the mean time GM start divesting your R&D out of Europe, unless your forecasting some kind of great recovery because I'm not. Rebuild your R&D in North America, stop depending on the Germans for innovation, and if you must use foreign design, look to Holden instead (Daewoo designs seem to have caught on so no worry there). Oldsmobile used to be the brand of innovation and experimentation for GM, maybe Buick should become that instead of Opel clones and upscale Chevys.

@highdesertcat I agree with you guys. The harsh reality is that GM, its subdivisions and its affiliations will all survive well into the future because the US government is not going to let GM die. GM will be bailed out again and again because the precedence was set when Bush put it on life-support until March 31, 2008 at which time Obama doubled down and handed out taxpayer money on a grand scale to save the UAW and GM. When national policy is to selectively decide who will live and who will die, GM can't lose. Management knows it, the UAW knows it and every one even remotely associated with GM knows it. And that's cool for those who support GM and will continue to buy their subsidized products but the bottom line remains that there simply aren't enough people on the planet who choose to buy anything GM, Opel, Vauxhall or from any other GM affiliate. And that's why GM will continue to lose money. Ultimately it is up to the buyers whether to buy GM products. That hasn't happened so, as some forecasters have voiced here and elsewhere, GM will have to be bailed out on a continual basis, most likely in the late 2014/2015/2016 time frame. If we can bail out the US Postal Service, a perpetual money-loser, certainly we will bail out GM and its unions well into the distant future because no one in Congress will admit that bailing out GM back in 2008 and 2009 was a mistake. We elected those people. They speak for us and set policy for "we, the people". This will cost the tax payers dearly and for a very long time to come. Just as predicted by those opposed to bailing out failed companies in America. Overcapacity is just a symptom. The disease that has completely taken over GM is terminal. GM will be on life-support forever, brain-dead but on life-support.

@ highdesertcat: I wish that continued bailouts are possible. However, I don't think GM can come back to the well for further taxpayer cash. GM had its chance to cut Opel loose...that and other actions made them very unpopular. Two metrics, the stock price and GM's market share, indicate to me that people are voting with their wallets. A third metric -- November's elections -- will show how people vote with their hearts and will determine the direction of further government support. If Richard Lugar's defeat for Indiana's senate seat is any indication, GM prospects don't look good.

@highdesertcat star_gazer, two things I would like to comment on: "...indicate to me that people are voting with their wallets." That's the scary part because GM just isn't winning back the hearts and minds of buyers like Fiatsler has done. And if we, the people, are ever to get our money back (hope springs eternal) then GM needs to be viable, profitable and self-sustaining. It is highly unlikely, barring divine intervention, that will ever happen. "November’s elections — will show how people vote with their hearts and will determine the direction of further government support." I think a lot of people are just going to stay home in November because if it is going to be an Obama/Romney bout, one is as bad as the other. The GOP simply does not have a contender as candidate that a majority will form behind. Obama has his re-election sewed up. He knows it. The 'crats know it. The GOP knows it. People are not going to vote AGAINST Obama just to put a like-minded person with a horrible track record as governor in the White House. Romney won't even carry Massachusetts where he was governor because of his track record there. He can pat himself on the back all he wants but most people in Mass are worse off because of his term in office and what he did to them, i.e. healthcare mandates and taxes. All the GOP is doing is putting up a good fight because they know they cannot get the Independents, Evangelical Christians, Baptists, Tea Partiers and Hardcore Conservatives to vote for Romney. Each faction has their own objections to Romney. And together, all those factions are a majority in themselves. IOW, there's more of them than people who will vote for Obama. Obama will handily win re-election. Every 'crat, union member and most blacks and hispanics will vote for him as will some pro-Obama Indies. These are the groups who benefitted from Obama's term in office. As a nation we can look forward to four more years of Obama and more of the same social welfare policies. People know this and are living their lives around these policies, each in their own way according to their means. Many are taking early retirement, getting on social security and stashing their money in their mattress so no one can track how much they have. Others are just going to live on the dole for as long as they can because it beats working for a living. Cradle to grave care, thanks to Obama and the 'crats. As an Independent I will be abstaining from voting for president although I will vote for local and state issues and representatives. Unless something really drastic happens I believe this coming election will be very similar to the one that put Clinton in office when there was a less than 50% turnout of the voters because few wanted to vote for Bush The Elder again and even fewer wanted to vote for Clinton. But no matter who wins in November, the government has GM's back and that of the UAW. Congress cannot admit to their constituents that the bail outs were a failure. Certainly not the 'crats! It is one thing to bail out a failed financial institution that actually makes money in their transactions. It's quite another thing to bail out a failed auto manufacturer that continues to lose money on a daily basis. With the first there's a reasonable chance to break even or recoup the money. With GM there is none.

@highdesertcat- your comment "...that’s why GM will continue to lose money." Is directly contradicted by facts. GM is making a lot of money and have nearly erased Opel losses already. "DETROIT — General Motors posted its ninth consecutive profitable quarter on Thursday. But almost three years after its taxpayer bailout and bankruptcy, the nation’s biggest automaker still can’t shed the stigma of being “Government Motors." http://www.nytimes.com/2012/05/04/business/gm-profit-falls-but-surpasses-forecasts.html?hpw You are living in the past, with flawed understanding of what really happened in '08 and what is happening now. GM vehicles are, by far, the most popular in the world.

@highdesertcat Olds, no doubt the facts as you interpreted them during 2007 and early-2008 contradicted the ultimate end for GM as well. GM was making lots of money then too. Didn't prevent GM from going belly-up, though. Whatever money GM is making today is flushed down the drain by its subsidiaries and partnerships and overarching liabilities like the UAW. Biggest problem is stale product with trucks lingering in the dinosaur era when everyone else, including RAM is banging away in the 21st century. Who can dispute the Ford EB V6? And the Pentastar V6 RAM with the eight speed auto is going to be very well received and will certainly attract the Dakota fans. Sergio and the BoD know this, that's why they approved this outing into RAM truck-space, where no man has gone before in recent history. Other GM vehicles like the Acadia/Traverse/Enclave are way overdue for updates and price reductions. Explorer, Grand Cherokee, Highlander and Pilot give the buyers so much more for their money. And how about that savior for GM in the mid-size class, the Malibu? Compare that to offerings from Ford, Chrysler and, not to mention all the foreigners, no wonder the Malibu is the wunderkind of the rental fleets and worth doodley-squat on the used market. And we haven't even ventured in to foreign-liaisons yet. We don't have to. Things are even worse for GM overseas. There were lots of people who had been forecasting GM's demise for at least five years prior to 2007 and early 2008, that I can recall. One of them was my broker who urged me to divest in spite of my adamant belief that America's auto industry was the bulwark of stability for investors. I was wrong! I stand by my interpretation today of where GM is going based on my interpretation of the facts available to me now, just like I stood by my interpretation of the facts in 2007 and early-2008 when I dumped all my US Auto stock after re-evaluating my overly optimistic view of the US auto industry. I thank my lucky stars for enough presence of mind to keep an open mind and listen to the advice of the industry watchers. Ultimately, we'll see what time will tell us, just like it did in 2007, 2008 and 2009. I would like to see GM survive and repay we, the people, for our kindness and generosity. But, really now, do you see that happening during YOUR lifetime? The buyers voted with their wallets, everywhere around the globe and GM isn't selling enough product and making enough money to be solvent. Not in the past. Not now, and not in the foreseeable future. Maybe Obama can give all of us a brand new GM car during his second term in office, and pay for it by raising taxes on the rich and spreading America's wealth around. That would certainly raise GM's profitability to new highs. But solvency? Not unless GM restructures and dumps Buick and GMC or fold them into the Chevrolet and Cadillac divisions, and refocuses on just those two divisions.