GM would rather have Opel, Vauxhall fall into insolvency than sell to Magna?
While General Motors was going through its 42 day bankruptcy period, one of the stories that didn't receive much play was the sale of GM's Opel brand. The major players in the Opel sale appear to be the German government, Canadian supplier Magna and Belgian private investor RHJ International.
The German government was reportedly willing to front 3.4 billion euros toward the deal, as long as Magna was the buyer. Magna has said that it wouldn't close any German factories if it purchased, making the supplier attractive to the German government. But Magna is tied to a Russian company that would receive GM's intellectual property if the sale is made final.
The Daily Mail in the UK is reporting that the General would rather push Opel into insolvency than sell to Magna. When GM went into Chapter 11, Opel was placed in a trust. Now that GM is free of bankruptcy and sales have picked up (slightly) in Europe, the Detroit-based automaker could possibly again own Opel by working through German insolvency laws. To make matters a bit more complicated, Opel's unions are threatening to demand pay raises and bonuses if the company isn't sold to Magna.
The sale of Opel looks like it's becoming more of a mess than originally anticipated. The status of Opel could become clearer by the end of this week, with a Opel on the agenda during a major board meeting at GM today and tomorrow.
[Source: Daily Mail | Image Source: Ralph Orlowski/Getty]
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Reader Comments (Page 1 of 3)
Avinash machado 8:45AM (9/09/2009)
Maybe GM had no intention of selling Opel at all.
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Autblogist! 8:49AM (9/09/2009)
"Maybe GM had no intention of selling Opel at all." It didn't make sense to me in the first place. Some of GM's best engineering is found in the Opel division.
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Jimbo 8:56AM (9/09/2009)
GM should keep Opel/Vauxhall. Let the unions shoot themselves in the foot by demanding more money to do the same high-quality job that got them in the mess in the first place.
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David Ederer 8:59AM (9/09/2009)
The new GM has to take a different path to success. The old way of always complying with demands set by others, has to change and they must start taking control of their own destiny. Whiteacre appears to have them going in the right direction.
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Ligor 9:01AM (9/09/2009)
just shut it down
sell Chevy's in the EU (import themn from the US and Canada) and just close the doors to Opel and Vuxhaul brands
they can keep the engineers to work for them as a design center in EU
shut all factories down for Opel and Vuxhaul
big deal
if the unions there want to do what they did in the US then they deserve it
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Bloke 9:03AM (9/09/2009)
"just shut it down
sell Chevy's in the EU (import themn from the US and Canada) and just close the doors to Opel and Vuxhaul brands"
Vauxhall commands a 12% market share in the UK. Great idea ... (rolls eyes).
MAXLD 10:01AM (9/09/2009)
Flash news for you: they already sell Chevy's in EU... and they are garbage. The same happens with the Dodge ones.
If Opel dies, the respective market share will be gone to VW Group (VW, Skoda, Seat), Ford Europe, PSA Group (Citroen, Peugeot), Renault, Fiat, Honda, Toyota, etc, etc...
GM is not stupid, if they loose Opel/Vauxhall brands, they will literally loose almost every market share they have in Europe. Opel cars are always top positioned in sales. Corsa, Astra, Meriva, Zafira, new Insignia... GM has no chance to achieve such market share with the Chevy brand... even less with US made cars. The quality standards required by the average European market are way higher.
Even the USA market it's been filled with more Japanese and European cars sales, so why would GM succeed in exporting their cans in one of the most demanding markets in the world? Try China... otherwise, don't even bother to think about it.
Bloke 9:01AM (9/09/2009)
"GM would rather have Opel, Vauxhall fall into insolvency ..." - Autoblog
Adam Opel and Vauxhall Motors are completely independent legal entities. What they have in common is that they sell GM Europe-developed products. Opel is a subsidiary of GM, while Vauxhall is a subsidiary of GM (UK) which in turn is a subsidiary of GM. Should Opel fall into the realm of German insolvency law, that has nothing directly to do with Vauxhall's financial position as a legal entity. Vauxhall's finances would however be affected if Opel stopped manufacturing some of its models.
In practice, should GM sell Opel, it would likely sell Vauxhall as well as GM (UK)'s other subsidiaries, which includes GMM Luton as well as Opel Ireland, Saab GB and Chevrolet UK distribution companies. The other subsidiaries would simply be wound down, sold off with GM's other asset dispositions and/or restructured.
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dougjp 9:10AM (9/09/2009)
One thing GM must be concerned about, and if they aren't, then call it "fitting arrogance" which wouldn't be surprising.
Europeans and people in the UK will hate GM if a sale doesn't go through after all this. Think sales are going to carry on anywhere close to present levels? It will become an "us vs. them" issue. The unions' comments are just a small indication.
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David Ederer 9:24AM (9/09/2009)
Europeans and people in the UK already "hate" GM and "Americans."
Dr. Greenthumb 9:30AM (9/09/2009)
It's mostly penis envy though.
Gary Lowe 9:26AM (9/09/2009)
Has GM ever done anything right? Why should the sale of Opel be any different?
Using the word "intellectual" whether it's property rights or anything else in conjunction with GM is a misnomer. I guarantee that within 5 years we will all watch and probably pay for... New GM Bankruptcy 2
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Dr. Greenthumb 9:43AM (9/09/2009)
Gary ma boy, you attempt at humor landed wide of the mark. Can you tell me what percentage of corporations last for more than 100 years? GM has done lots of things right, they've also made some major boo-boos.
The General Motors Corporation, will out you my dear Sir.
10 years ago they would have failed coming out of Chapt. 11, because their product portfolio was uncompetitive and they were too large and redundant. Still somewhat redundant, but their product portfolio is magnitudes better than before, and getting better as they go forward.
With Ford and GM raising their game, I say that over time, the imports will be beaten back. It's already starting to happen. Ask Toyota about that brick wall they ran into recently, it's not just the recession.
Dr. Greenthumb 9:46AM (9/09/2009)
Excuse the typo, should have Read:
The General Motors Corporation, will out live you my dear Sir.
daleam 11:12AM (9/09/2009)
"Gary Lowe - Has GM ever done anything right?"
GM didn't maintain it's position as the number one automaker in the world for all those decades by doing nothing right. So Toyota took that crown. Big deal. GM is still the number one automaker in the US even after the big C4C scam. I predict that next month will prove to be more devastating to Toyota than GM in a month by month comparison.
Dr. Greenthumb 9:45AM (9/09/2009)
Excuse the typo, should have Read:
The General Motors Corporation, will out live you my dear Sir.
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Rich 10:21AM (9/09/2009)
That's "outlive", mate.
Dr. Greenthumb 10:31AM (9/09/2009)
Yep, what Rich said. Thanks for catching that mate.
Luso 9:55AM (9/09/2009)
Madness, absolute madness. This madness has been going on for too long. GM should be made aware that at the end of the day there's people dependent on their decisions.
http://www.carnorama.com
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Rich 10:20AM (9/09/2009)
You're reporting a tabloid "SHOCKER!" story as fact.
What a shambles.
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