GM Board Decides to Retain Opel

[Justin Bimmer]

GM Board Decides to Retain Opel

DETROIT – Given an improving business environment for GM over the past few months, and the importance of Opel//Vauxhall to GM’s global strategy, the GM Board of Directors has decided to retain Opel and will initiate a restructuring of its European operations in earnest.

“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” said Fritz Henderson, president and CEO. “We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”

On a preliminary basis, the GM plan entails total restructuring expenses of about € 3 billion, significantly lower than all bids submitted as part of the investor solicitation. GM will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring. While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence.

“While strained, the business environment in Europe has improved.” Henderson said. “At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured. We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We’re also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement.”

Henderson added that GM also hopes to build on its already significant business in Russia and to resume work directly with GAZ to contribute to both the modernization of its operations and the joint development of the Russian vehicle market on a mutually attractive basis. More details on the next steps in the restructuring will be provided as the plans and developments warrant.

[NINETY EIGHT REGENCY]

GM, citing improved financial health, decides to keep Opel

JAMIE LAREAU

AUTOMOTIVE NEWS

NOVEMBER 3, 2009 - 5:21 PM ET

DETROIT -- General Motors Co. has decided to keep Opel, undoing months of painstaking negotiations to sell the European unit to a Russian-backed group led by Magna International Inc. of Canada.

GM cited the improving business environment over the past few months and the importance of Opel and its British unit Vauxhall to its global strategy as reasons for the switch.

“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” CEO Fritz Henderson said in a statement.

“This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future.”

GM's preliminary plan lists total restructuring expense of about 3 billion euros, or about $4.43 billion. GM said it plans to work with all European labor unions to develop the plan.

GM says Opel is outperforming assumptions set in its viability plan and its immediate liquidity is stable.

“While strained, the business environment in Europe has improved,” Henderson said.

“At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.”

GM's 13-member board made the decision today after meeting in Detroit.

A Magna spokeswoman declined comment.

[Justin Bimmer]

Opel's future leaves open his future role at carmaker

Automotive News Europe

November 3, 2009 15:09 CET

BERLIN – Opel Chairman Carl-Peter Forster left open questions about his future role at General Motor Co.'s European unit at an industry conference here.

Media reports have suggested that Magna International Inc. executive Herbert Demel could become head of Opel if General Motors Co. decides to sell a majority stake in the German-based unit to the Canadian supplier and its Russian partner Sberbank.

Forster, who is also president of GM Europe, said he and Magna co-CEO Siegfried Wolf decided to focus on finding a solution for Opel before the carmaker's management roles are decided, adding that he "wants to reserve the right to decide" on his future.

Forster said he supports Magna's bid to take over Opel.

New Opel under Magna would have better access to strong growth opportunities in Russia while keeping close technical cooperation with GM, Forster told the Automobilwoche Congress Tuesday.

Citing Magna sources, WirtschaftsWoche on Sunday said that Magna's Wolf wants Demel, a former CEO of Fiat S.p.A's auto division and Volkswagen AG's Audi premium brand to head Opel.

Demel is Magna's chief operating officer in charge of vehicles and powertrain at Graz, near Vienna, Austria

GM's board was meeting Tuesday to reconsider it decision to sell a 55 percent stake in Opel to Magna and Russian state lender Sberbank.

The deal was agreed in September but was called into question last month after European Union competition authorities expressed concerns about the fairness of the bidding process.

Forster said if GM decided to sell Opel to Magna, the likely would not be finalized until Christmas.

The deal had been expected to be signed in early October, with the closing planned for the end of November.

Opel has liquidity until January, Rainer Einenkel, who chairs the works council at Opel's Bochum plant in Germany, last week told Automobilwoche, Automotive News Europe's sister publication.

The German government provided 1.5 billion euros of aid to Opel in June to keep the carmaker afloat when GM went into short-lived bankruptcy.

The money was due to run out November 30 but Opel's finances have by improved sales due to Germany's the scrapping bonus and the success of the new Insignia car.

[Camino LS6]

Okay, what are the implications of this?

[Justin Bimmer]

Okay, what are the implications of this?

We don't know yet. As soon as I hear something I will put it in this thread.

Edited November 3, 2009 by JamesBond
Added GM Media Release to first post.

[Camino LS6]

I was actually posing the question to the membership, and hoping for speculation.

[Justin Bimmer]

I think the main benefit is GM will have control of its intellectual property instead of a third-party. I don't really see this as having any huge implications on product in the next few years.

[Oracle of Delphi]

I leave Detroit for Germany tomorrow, someone won't be happy to see me ...

[Camino LS6]

I get the feeling that quite a few folks won't be too happy.

[NINETY EIGHT REGENCY]

I leave Detroit for Germany tomorrow, someone won't be happy to see me ...

I get the feeling that quite a few folks won't be too happy.

It seems Carl Peter Forster will soon be looking for a job.

To quote Anne Robinson catch phrase:

You are the weakest link. Goodbye!

I got your personal message PCS from James Bond(Justin). It will be respected.

[Cadillacfan]

My question: What will happen to Frank Weber, chief engineer for the Volt who just left to take a senior position at Opel when it was supposed to be sold off?

Will he stay with Opel under GM or leave? I hope GM allows him to stay so he doesn't go off and develop a better volt-type car for BMW, Mercedes, or VW.

[NINETY EIGHT REGENCY]

THE NEW GM

About General Motors: General Motors, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.

Edited November 4, 2009 by NINETY EIGHT REGENCY

[CARBIZ]

"Frank, Fritz here. Frank, how much does GM spend with Magna every year?" [Long pause] "That much, eh? Listen, Frank, I know you're used to dealing with Rick, but I'm the boss now and I have Obama backing me, so here's the deal: we really don't want to ditch Opel, but ya know, right now with the German election and the bad news coming out of Wall Street - well, we just can't make a good PR case for keeping Opel. So here's what we want you to do, can you put together a deal with some Russian bank that we all know neither Washington or the Germans will like and can you drag this thing out for, say, six months or so? I know you're pretty good at shuffling paper, so can you do that for us?" [Long pause.] "Thanks, Frank. You're a pal. Yeah, no problem, you know we're gonna open the Oshawa plant again as soon as all this blows over. Yep, we'll keep those orders flooding in! Thanks again, Frank. Say hello to the wife... ah, what's her name again?"

[regfootball]

I leave Detroit for Germany tomorrow, someone won't be happy to see me ...

you don't tip the cabbies in Germany?

get to work on getting me a turbo astra for my driveway please

Edited November 4, 2009 by regfootball

[ZL-1]

To quote Anne Robinson catch phrase:

You are the weakest link. Goodbye!

PCS is really Anne Robinson? :shock:

J/K

Safe flight to Germany, B!