Opel/Vauxhall News: PSA In Discussions With GM About Possibly Acquiring Opel

[William Maley]

PSA Group is in discussions with General Motors on various strategic initiatives, including the possibility of acquiring Opel/Vauxhall. The news was first broke by Bloomberg and Reuters early this morning as sources revealed the two were in talks about swapping the ownership of Opel. Since then, a spokesman for PSA Group confirmed the talks.

The maker of Peugeot, Citroen and DS cars is "exploring a number of strategic initiatives with GM with the aim of increasing its profitability and operating efficiency, including a potential acquisition of Opel."

The two automakers already share production of SUVs and commercial vans, a key remnant of a possible alliance between the two automakers back in 2013.

Why would GM sell Opel? Why is PSA Group interested in it? 

“I can see why GM may possibly seek to sell its European division, which hasn’t made money in many years. It is less clear why Peugeot would be interested in buying GM’s assets. The purchase would give them capacity in Germany, one of the most expensive countries to produce cars and would lead to excess capacity,” said George Galliers, an analyst with Evercore ISI.

For PSA Group, the purchase of Opel would give them access to Opel's engineering and electric-car tech, along with increasing their scale and cost savings from joint purchasing a source tells Bloomberg. 

Source: Bloomberg, Reuters

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[G. David Felt]

So then were would the Buicks and Holdens come from?

Does that mean all that work would come back to the good ol USA?

[hyperv6]

My take on this was shock at first but then a little more info appears to change the dynamic.

#1 you can not look at this as a product deal as it is more economic and labor.

Lets face it no matter how good GM makes the Opel it is a money looser due to labor and plant issues. Opel has been a big drain of money all along.

It is reported that GM would remain a partner but not the principal. I some how wonder with the change in ownership PSA can close plants and renegotiate contracts with the unions GM can not do.

I really do not see GM bailing on the global Buick/Opel/Vauxhall/Holden plans. While they may not own the whole thing they will own part of it and just put burden of dealing with the economics to PSA.  I have seen many companies do similar to clean house.

Also while GM may not have as much profit potential they really will lose less money since they have been years from profit and the outlook is little chance of near term profit.

Product wise I see little change but how business is done will change and as it is now that may not be a bad thing.

GM is like a guy hanging on a hot pipe 50 feet over a tank of sharks. He has a choice to hang on and burn his hand till they are useless to swim. Or he can drop now before his hands are burned useless and try to swim out of the pool before the sharks get him. Neither choice is great but you take the one that has the best odds.

[NINETY EIGHT REGENCY]

I have been watching this play out this morning. Buick and Holden would be impacted by this more than anyone else.  What about GM China? I do not know if I am favor of this as GM would have no role in Europe. Killing Pontiac and Oldsmobile solved what problem? 

I would rather there be some sort of joint venture and sharing of resources than a right out buyout of Opel.  GM would be smaller than it is now. There are too many ramifications in this.  Ford is one Ford globally as Volkswagen is too.  

[Drew Dowdell]

This seems odd to me.   Opel loses money because GM wants it to lose money.  So much R&D is coming out of Europe, but the other divisions are booking the profits from that R&D.  Swinging Opel from the red to the black is just a change in accounting practice. 

I would think that GM buying up PSA and then merging operations with Opel would make more sense in the grand scheme of things.  

[riviera74]

Drew, why should GM BUY PSA?

The auto market in Europe has too many brands and too much capacity given low and falling sales.  GM has been leaving unprofitable markets ever since Mary Barra has been CEO, which is a good thing.  The European market will be in an auto recession before we are here in the USA.  Even though a lot of R&D is in Europe, that is NOT where the $$$ is.  If and only if auto capacity were cut in half, the auto market would begin to fully recover from the the last eight or nine years.  Opel may have its place, but shuttering planes in Germany is extremely difficult, especially compared to the USA.  Better to let PSA and VW fight over a shrinking market than play (and lose $$) in this space.

As for killing Pontiac and Oldsmobile, the problem was that there were simply too many brands given a US market share of less than 30%.  If it was 1990 or earlier, both could be kept because they added to the bottom line.  I miss Olds but I have accepted that GM survival was more important, especially when GM ended Pontiac and Saab and Saturn and Hummer.  GM could not be what it was 25 years ago because of the Japanese and the Korean automakers period.  Same with MB, BMW and VW. 

CEO Barra understands something we all should be cognizant of: smaller and more profitable (and higher free cash flow) is better.  No need to be huge and lumber towards a possible liquidation. Remember what happened to Chrysler after 1998, and the current fate of FCA points to a long-term end.

[G. David Felt]

@riviera74 I believe Drew as do I see where you could bring in PSA, get the intellectual property rights and then close and consolidate Opel / PSA to have a strong Engineering division with some profitable auto's that are used across the company.

I agree with you that Europe is ready I think for a consolidation in the auto business. China will be the next place for consolidation as right now way to many auto companies there too.

[hyperv6]

I think some of you forget GM used to own PSA. They sold them I believe in 2013.

If such a deal is made GM has made it clear they would still be a partner in this deal. The truth is it is the opposite of what it was where GM was the primary they would change places and own the minority but still a sizeable chunk.

I believe PSA being a true Euro company and also being a new owner will have leverage to do things about plants and labor GM already have their hands tied on.

Too many people will look at this as a product deal and it is everything but.

I expect that if this deal comes in we will see little change in GM product or plans for new models.

Something has to give as they can not continue to lose money. They do not want to lose money in Opel as they have made changed to help but they are limited to what they can do.

The thing today is not so much how big you are but how profitable and efficient you are. Like at a race track you can over drive the track and be slower or you can slow your lap and not over drive putting in a faster lap. It is the old go slow to go faster. It is all about efficiency.

The 1800 pound gorilla in the room is while GM profits are up and things are going pretty well they need better stock performance. In fact many Automakers really need better stock performance. This is part of why there is such a rush to autonomous cars as everyone see it as a way to use technology to drive their stock.

I think we need to really take a look at this with more info as it comes in but in the end while this is earth shaking in the headline I expect we will see little change in the products. Where they are built and who builds them may be the major change.

FCA is way over capacity but they have major trouble closing their euro plants do to rules and unions.

I see the sale as a reset for GM with out going though chapter 11 at Opel.

[Cmicasa the Great]

I hate to see GM sell off Opel/Vaux, but not making profit since 1999 still has to burn their ass no matter the tax benefits here in the US. GM.. may be gearing up for new negotiations with IG Metall. Also the loss of Opel at this point will have little effect on Buick or Holden simply because the engineering on those products are GM's.. they are not property of Opel. Furthermore I'd put American engineering up against the European any day of the week.. especially now. The only real loss will be that of 1.1 Million cars. This will effectively put them behind Renault/Nissan, or make them #4... but even with that.. GM made $12 Billion last year AFTER a loss of almost $1B in Europe

[Drew Dowdell]

28 minutes ago, riviera74 said:

Drew, why should GM BUY PSA?

The auto market in Europe has too many brands and too much capacity given low and falling sales.  GM has been leaving unprofitable markets ever since Mary Barra has been CEO, which is a good thing.  The European market will be in an auto recession before we are here in the USA.  Even though a lot of R&D is in Europe, that is NOT where the $$$ is.  If and only if auto capacity were cut in half, the auto market would begin to fully recover from the the last eight or nine years.  Opel may have its place, but shuttering planes in Germany is extremely difficult, especially compared to the USA.  Better to let PSA and VW fight over a shrinking market than play (and lose $$) in this space.

As for killing Pontiac and Oldsmobile, the problem was that there were simply too many brands given a US market share of less than 30%.  If it was 1990 or earlier, both could be kept because they added to the bottom line.  I miss Olds but I have accepted that GM survival was more important, especially when GM ended Pontiac and Saab and Saturn and Hummer.  GM could not be what it was 25 years ago because of the Japanese and the Korean automakers period.  Same with MB, BMW and VW. 

CEO Barra understands something we all should be cognizant of: smaller and more profitable (and higher free cash flow) is better.  No need to be huge and lumber towards a possible liquidation. Remember what happened to Chrysler after 1998, and the current fate of FCA points to a long-term end.

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

[Cmicasa the Great]

Just now, Drew Dowdell said:

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

So. What's the reason for this U think? Bluff for a different end game? Help from German Gov? Give Backs from Unions??? 

[Drew Dowdell]

10 minutes ago, Cmicasa the Great said:

So. What's the reason for this U think? Bluff for a different end game? Help from German Gov? Give Backs from Unions??? 

Pressure on the German unions, pressure on the German government.  Trying to impress our own administration.

[Cmicasa the Great]

56 minutes ago, Drew Dowdell said:

Pressure on the German unions, pressure on the German government.  Trying to impress our own administration.

I agree with all except the "impress Admin." I see no relevant reason why GM would give up its European ops to impress "the Orange" as he himself has global ops as well.. that are subject to the ins and outs of doing business in said countries. 

I look at it as 

1) Pressure Unions

2) Pressure German and UK gov to give more subsidies and back them in pressuring unions

3) possibly just getting rid of headache of Brexit and its impact on EU

4) There is talk of GM possibly doing this to open the door to buying FCA.

[FordCosworth]

" Adding SUVs and boosting market share were not key topics when talking about Opel a few years ago. Not when Morgan Stanley’s Adam Jonas and his team had classified Opel as the “single biggest threat” to GM’s long-term survival. According to their estimates, Opel and its UK sibling, Vauxhall, already had lost

$16 billion in the previous dozen years and would bleed $1 billion more each year on average into the 2020s. "

http://europe.autonews.com/article/20160131/ANE/160129856/how-opel-ford-will-make-europe-a-reliable-profit-source-after-years

http://www.ien.com/operations/news/20852087/gm-may-have-buyer-for-moneylosing-opel

Last year, Opel was a money loser to the tune of $.257Billion 

Sell the perpetual money pit 

 

 

[Drew Dowdell]

44 minutes ago, FordCosworth said:

" Adding SUVs and boosting market share were not key topics when talking about Opel a few years ago. Not when Morgan Stanley’s Adam Jonas and his team had classified Opel as the “single biggest threat” to GM’s long-term survival. According to their estimates, Opel and its UK sibling, Vauxhall, already had lost

$16 billion in the previous dozen years and would bleed $1 billion more each year on average into the 2020s. "

http://europe.autonews.com/article/20160131/ANE/160129856/how-opel-ford-will-make-europe-a-reliable-profit-source-after-years

http://www.ien.com/operations/news/20852087/gm-may-have-buyer-for-moneylosing-opel

Last year, Opel was a money loser to the tune of $.257Billion 

Sell the perpetual money pit 

 

 

Again, it's an accounting shell game.  Opel is a major R&D center for GM and the products resulting from that R&D are sold globally. 

[FordCosworth]

3 hours ago, Drew Dowdell said:

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

Worldwide, Ford does the same thing you state with Ford of Europe. 

And they are not going on 2 straight decades of losses.

[hyperv6]

Drew is right as this is an end around to get breaks in Germany from the government and Unions like I stated earlier. 

PSA is a Euro company from France and has special consideration from other countries in European Union. 

Germany is a bastard to do business in anymore and they have rejected GM's attempts for breaks. The Unions are worse than the UAW at their toughest.  Give control to the French and they can deliver like Lafayette did to Washington.

GM is still going to MFG and engineer these cars as the French know better than to do it themselves outside the Diesels.

We see things like this happen in this country in a way. Often trucking companies will close down and sell out to a new buyer. Yet they reopen with the same drivers in the same building and the same trucks. The also get breaks from cities to remain and they get a new cut deal with the unions.

What GM is doing here is not a sure thing to work but they got nothing to lose.

PSA and GM have had a good relation for years when GM owned them. Also they sold their control of part of them before.

I see GM getting what they need better deals and I see PSA getting needed capital with more income and at some point GM will regain their share back. It is a win win for both companies if it works out. As it is both are losing money.

As for Buick and Holden they will go on just as they have under GM control with cars engineered by Opel.

Too often socialistic governments will drive companies into the ground. We saw it in England and now in Germany. They get heavy handed to the point they drive out business or break them as they see them as evil and then everyone suffers. California is doing just this to many companies and that is why they are leaving. That is also why half of California is now in Colorado and Oregon. 

At least most here are getting to this same conclusion but on other web sites they are about to bust a blood vessel and thin Mary is the devil incarnate. They are really out in left field as they thing this is all about product and neglect the government and labor end. 

Lets put it this way GM has little option here as if they let Opel fail Germany will not bail them out. 

This is why companies in America file for bankruptcy. It is not a failure so much in many cases as it is a reset. 

[riviera74]

A major difference in the US corporate environment and Europe's corporate environment is bankruptcy law.  Here you can reset (see GM in 2009 and its use of Section 363); in Europe bankruptcy tends to mean liquidation and a whole LOT of lawsuits since BK is about revenge not just money.

If it is as bad as hyperv6 says it is for the people of Europe to think this way (i.e. excessive socialism AND a ridiculous sense of entitlement from corporate Europe), then much of corporate Europe should move a whole lot of their operations (not just a few factories) to the USA to save a whole lot of bother.  I doubt they will (unless Congress and the current administration end corporate taxation).  If I were running a European multinational, I would certainly consider a move to the USA as a lower-cost, less-regulated place to do any and all business and let the Old World deal with the consequences of no jobs and a very nasty recession to go along with the BK of their socialism and their governments.

[ccap41]

5 hours ago, FordCosworth said:

Worldwide, Ford does the same thing you state with Ford of Europe. 

And they are not going on 2 straight decades of losses.

I see what you mean here. What GM needs to do to me is consilidste brands and actually be more like Ford in the sense that they don't have as many brands already costs around more and more. Why not try and get rid of some of the EU brands and use more Chevy/Buick/GMC OR vise Vera's and use Opel here. Use their own version of OneFord. While tacky, it's effective. 

[Robert Hall]

13 minutes ago, ccap41 said:

I see what you mean here. What GM needs to do to me is consilidste brands and actually be more like Ford in the sense that they don't have as many brands already costs around more and more. Why not try and get rid of some of the EU brands and use more Chevy/Buick/GMC OR vise Vera's and use Opel here. Use their own version of OneFord. While tacky, it's effective. 

They already tried Chevrolet in Europe, it failed.   Opel/Vauxhall have been the European GM brands for so long that I couldn't see them changing names..

[daves87rs]

11 hours ago, Drew Dowdell said:

This seems odd to me.   Opel loses money because GM wants it to lose money.  So much R&D is coming out of Europe, but the other divisions are booking the profits from that R&D.  Swinging Opel from the red to the black is just a change in accounting practice. 

I would think that GM buying up PSA and then merging operations with Opel would make more sense in the grand scheme of things.  

Well, letting play around with Opel while they work in other places to make money might not be a bad idea. If GM continues some of the current successes at the moment, I could see them picking up PSA down the road....

Would make sense if they plan not to worry about Europe and work on other markets instead....

3 hours ago, hyperv6 said:

Drew is right as this is an end around to get breaks in Germany from the government and Unions like I stated earlier. 

PSA is a Euro company from France and has special consideration from other countries in European Union. 

Germany is a bastard to do business in anymore and they have rejected GM's attempts for breaks. The Unions are worse than the UAW at their toughest.  Give control to the French and they can deliver like Lafayette did to Washington.

GM is still going to MFG and engineer these cars as the French know better than to do it themselves outside the Diesels.

We see things like this happen in this country in a way. Often trucking companies will close down and sell out to a new buyer. Yet they reopen with the same drivers in the same building and the same trucks. The also get breaks from cities to remain and they get a new cut deal with the unions.

What GM is doing here is not a sure thing to work but they got nothing to lose.

PSA and GM have had a good relation for years when GM owned them. Also they sold their control of part of them before.

I see GM getting what they need better deals and I see PSA getting needed capital with more income and at some point GM will regain their share back. It is a win win for both companies if it works out. As it is both are losing money.

As for Buick and Holden they will go on just as they have under GM control with cars engineered by Opel.

Too often socialistic governments will drive companies into the ground. We saw it in England and now in Germany. They get heavy handed to the point they drive out business or break them as they see them as evil and then everyone suffers. California is doing just this to many companies and that is why they are leaving. That is also why half of California is now in Colorado and Oregon. 

At least most here are getting to this same conclusion but on other web sites they are about to bust a blood vessel and thin Mary is the devil incarnate. They are really out in left field as they thing this is all about product and neglect the government and labor end. 

Lets put it this way GM has little option here as if they let Opel fail Germany will not bail them out. 

This is why companies in America file for bankruptcy. It is not a failure so much in many cases as it is a reset. 

Yep-my other thought if things go south there.....

[hyperv6]

1 hour ago, riviera74 said:

A major difference in the US corporate environment and Europe's corporate environment is bankruptcy law.  Here you can reset (see GM in 2009 and its use of Section 363); in Europe bankruptcy tends to mean liquidation and a whole LOT of lawsuits since BK is about revenge not just money.

If it is as bad as hyperv6 says it is for the people of Europe to think this way (i.e. excessive socialism AND a ridiculous sense of entitlement from corporate Europe), then much of corporate Europe should move a whole lot of their operations (not just a few factories) to the USA to save a whole lot of bother.  I doubt they will (unless Congress and the current administration end corporate taxation).  If I were running a European multinational, I would certainly consider a move to the USA as a lower-cost, less-regulated place to do any and all business and let the Old World deal with the consequences of no jobs and a very nasty recession to go along with the BK of their socialism and their governments.

Taxes here have been too high to move it all here but that is a door that could be opened. 

Spain is going bankrupt and Greece has been in trouble. 

England is tired of bailing others out with no say. France is not setting the world on fire. 

There will be a time the Germans will tire of Merkle. The question is how tapped out will The be as they have really been the only solvent country. With the large run of incoming refugees and a sluggish economy it will not get better soon. If they are forced to bail out any others it will only hurt them more.

I agree the timing is right to poach companies to come here and work with them. The only real problem here is just work ethic. We can not get people to show every day or pass a simple drug test. 

We have a hard time even with good paying positions to get people that do not loose their job from missing too much time or getting nabbed in a very basic drug test. Keeping in mind these are the ones who could pass the background test due to the need to handed sensitive information.

[ccap41]

2 hours ago, Cubical-aka-Moltar said:

They already tried Chevrolet in Europe, it failed.   Opel/Vauxhall have been the European GM brands for so long that I couldn't see them changing names..

Then they need to try harder.. try something that Europe and US both like. It seems to work for everybody else. 

[aurora97]

PSA may try to use this purchase as a means to come back into the North American market.  Also, Europe does not have Chapter 11 BK in the same way that the U.S. does.

[G. David Felt]

On 2/15/2017 at 10:48 AM, ocnblu said:

 

Back on Topic, This is an interesting thought about PSA and GM. We could see the start of consolidation and hopefully a clean up of the over capacity in Europe.

[hyperv6]

On 2/15/2017 at 11:01 AM, ccap41 said:

 

 

On 2/15/2017 at 11:09 AM, dfelt said:

 

Back on Topic, This is an interesting thought about PSA and GM. We could see the start of consolidation and hopefully a clean up of the over capacity in Europe.

The stock market has jumped at the speculation and Mary has gone to Germany to calm nerves.

Over capacity is a major issue not only for GM but many automakers. FCA is in real bad shape in over capacity in Europe and they have no easy way out.

Edited February 19, 2017 by Drew Dowdell

[G. David Felt]

On 2/15/2017 at 11:13 AM, hyperv6 said:

Over capacity is a major issue not only for GM but many automakers. FCA is in real bad shape in over capacity in Europe and they have no easy way out.

 

I agree with your FCA is over capacity and bringing back Alfa was I think Sergios way to appease the Italian Unions and add jobs but in essence he has made the company worse as he was short sighted and did not think it out long term.

If he had used the addition of Chrysler to build up existing product lines and then bring in a quality product rather than the crap Fiat stuff he would have done much better.

Sergio's EGO is writing checks he cannot cash!

[ocnblu]

I have a feeling that whatever problems FCA has with quality, they cannot be put solely on the assembly line, more so on the engineers.  I just went over to Edmunds and read owner reviews on the 2016 Renegade, for example... the level of electrical gremlins ppl are reporting with this vehicle are unreal... how is this assembly's fault, unless grounds are being improperly anchored or something simple like that?  I know it's not assembled in USA, but it is perplexing.

[ocnblu]

I think maybe blitzing an Opel thread with this type of trippy tangent is not advisable.  On other fronts, it seems like this deal could be very close to happening.  TO THE BUNKERS, I SAY!

[Cmicasa the Great]

16 hours ago, ccap41 said:

I see what you mean here. What GM needs to do to me is consilidste brands and actually be more like Ford in the sense that they don't have as many brands already costs around more and more. Why not try and get rid of some of the EU brands and use more Chevy/Buick/GMC OR vise Vera's and use Opel here. Use their own version of OneFord. While tacky, it's effective. 

Its not tacky... why is it tacky??? What does that even mean? One Ford is irrelevant in this situation as GM is already ONE GM, just with a few extra names. ONE FORD is not effective when Ford is also Lincoln and Vignale(which is essentially Mercury). The point of the "ONE" is that platform sharing, engines and tech be synergized 

[Cmicasa the Great]

16 hours ago, Cubical-aka-Moltar said:

They already tried Chevrolet in Europe, it failed.   Opel/Vauxhall have been the European GM brands for so long that I couldn't see them changing names..

Chevrolet Europe only "failed" because Chevrolet was competing directly with Opel in its home atmosphere. Ironically its the same reason why Opel failed in the United States basically competing with Chevy outta Buick dealerships

[ocnblu]

Over onto the Facebook, I see a good amount of comments from Europeans who come in and say they love their Chevy and want to buy a new one when it's time.

[William Maley]

I think this thread needs to be locked for a bit.

[Drew Dowdell]

On 2/14/2017 at 3:38 PM, FordCosworth said:

Worldwide, Ford does the same thing you state with Ford of Europe. 

And they are not going on 2 straight decades of losses.

SHELL GAME.... say it with me! It's all accounting tricks.  Losses get booked to one division, profits to another.   GM China would have nearly NO SALES without all of the R&D coming out of GM Europe.   They sell 1 million Buicks a year in China, with most of those being Opel based, meaning none of the R&D for those Opel cars is coming from GM China.  That makes China look extra profitable and GM Europe not so much. 

But now GM has ammunition against the German Unions and the German government..... 

[Drew Dowdell]

On 2/14/2017 at 11:17 PM, ccap41 said:

Then they need to try harder.. try something that Europe and US both like. It seems to work for everybody else. 

Not quite. Toyota and Honda have struggled there for years.

It wasn't until fairly recently that there was any model overlap between Ford US and Ford EU.

[hyperv6]

Most auto makers are struggling in Europe. They may be making money but profits and volumes are not growing even for the well established. 

This is why China is even very important to them. 

We have so much to learn of this deal yet. But in the end G Ms losses will be stemmed and stock and profupits will reflect this.

We need to keep in mind anything GM is doing at Opel can be done at any of their other tech centers. Much of it was spread globally anyways. 

Also sales in Europe with Opel were modest compared to sales in the more important markets. 

GM is a very versatile company and they can transfer any work and technology to another site with little effort.

[Drew Dowdell]

On 2/15/2017 at 1:27 PM, Cmicasa the Great said:

Chevrolet Europe only "failed" because Chevrolet was competing directly with Opel in its home atmosphere. Ironically its the same reason why Opel failed in the United States basically competing with Chevy outta Buick dealerships

Chevy Europe failed because they were peddling old Daewoos.

[Drew Dowdell]

1 hour ago, hyperv6 said:

Most auto makers are struggling in Europe. They may be making money but profits and volumes are not growing even for the well established. 

This is why China is even very important to them. 

We have so much to learn of this deal yet. But in the end G Ms losses will be stemmed and stock and profupits will reflect this.

We need to keep in mind anything GM is doing at Opel can be done at any of their other tech centers. Much of it was spread globally anyways. 

Also sales in Europe with Opel were modest compared to sales in the more important markets. 

GM is a very versatile company and they can transfer any work and technology to another site with little effort.

There is still a possible brain drain for GM to be concerned about. 

[Drew Dowdell]

I've had to hide 90% of the posts in this thread.  You people are getting ridiculous with your off topic tangents. 

Back to the PSA / Opel deal.

[hyperv6]

25 minutes ago, Drew Dowdell said:

There is still a possible brain drain for GM to be concerned about. 

I am sure anyone or anything of value at Opel has or will be moved or accessible. 

GM would not lose anything the can not afford to lose. We saw at Holden those of value were moved or promoted. 

GM is large enough to absorbs any drain of Opel.

Lets face it name something Opel does that could not be done anywhere in GM's system. 

The greatest risk may be the Buick wagon but I suspect even it is figured into the deal.

Now if GM was not a company that fully able in several other continents and if Opel was a major source of income and growing I would be more concerned.

The greatest challenge us the emotions involved by loyal Opel customers and over reacting GM fans. 

Now how good of a deal in the end the details will tell us. No matter what in the end the flow of losses will be stemmed and that is something GM and Opel had little chance of doing on their own.

They could sell Opel and let PSA make new deals and then buy Opel back at a profit to PSA and then run a more efficient profit making company. That is pure speculation but something similar could be in the works.

 

[Drew Dowdell]

3 minutes ago, hyperv6 said:

I am sure anyone or anything of value at Opel has or will be moved or accessible. 

GM would not lose anything the can not afford to lose. We saw at Holden those of value were moved or promoted. 

GM is large enough to absorbs any drain of Opel.

Lets face it name something Opel does that could not be done anywhere in GM's system.

 

A good 4-cylinder diesel.  Good 4-cylinder turbo engines. Superior suspension and steering tuning (the Opel people seem to have it down better than the GMNA people, at least for typical consumer products outside of the high performance V-series and Camaro stuff). 

GMNA and GMDAT can obviously tune a family sedan's ride and drive.... but Opel does it better. 

[Cmicasa the Great]

12 hours ago, Drew Dowdell said:

Chevy Europe failed because they were peddling old Daewoos.

And that.  Question is..  Is their reputation so damaged that there is no way to recover from that debacle?   Full on Chevy with already existing Corvette and Camaro... Cruze,  Malibu,  Sonic,  Volt and Bolt..  Nox,  and Traverse with an Omega based Impala could be a very loved lineup 

11 hours ago, Drew Dowdell said:

A good 4-cylinder diesel.  Good 4-cylinder turbo engines. Superior suspension and steering tuning (the Opel people seem to have it down better than the GMNA people, at least for typical consumer products outside of the high performance V-series and Camaro stuff). 

GMNA and GMDAT can obviously tune a family sedan's ride and drive.... but Opel does it better. 

I think it has more to do with American tolerance for ride vs European desires.  Quite frankly every European I know has always criticized American MARKET mid and compact cars as soft riding. Not always in the negative,  but noticeable none the less.  That goes for an American Chevy,  Ford,  Honda or Toyota for that matter 

[hyperv6]

12 hours ago, Drew Dowdell said:

A good 4-cylinder diesel.  Good 4-cylinder turbo engines. Superior suspension and steering tuning (the Opel people seem to have it down better than the GMNA people, at least for typical consumer products outside of the high performance V-series and Camaro stuff). 

GMNA and GMDAT can obviously tune a family sedan's ride and drive.... but Opel does it better. 

I think you overestimate Opel an underestimate GMNA.

also anyone of value woul be moved. We saw that with Holden.

Keep in mind the only thing limiting GMNA is the choices they make. The Cobalt and HHR were not well sorted suspensions but the were given to Mark Stielow to sort out. Both became world class cars. Mark also is behind the Z/28 and I believe the new ZL 1. 

The key to better suspension engineering is in he hands of the product planners not Opel engineers. 

Diesels account for so little and much it is shared development anyways some with PSA.

As we have seen many of GM cars are tune well in standard form even with ot the extra badging. 

The seceret is less spring, better dampers, moderate bars and right sized tires.

In the past a F41 suspension was bigger tires, stiffer springs and big bars with little in the way of better dampers. 

Today they know less is more and you do not a stiff suspension off the Warren black lake. 

Inused to work with Mark and he is a world class chassis engineer. He is overseeing more and more and the lack of Opel is not going to be the impact some think. 

You do not need to be German anymore to turn corners.

1 hour ago, Cmicasa the Great said:

And that.  Question is..  Is their reputation so damaged that there is no way to recover from that debacle?   Full on Chevy with already existing Corvette and Camaro... Cruze,  Malibu,  Sonic,  Volt and Bolt..  Nox,  and Traverse with an Omega based Impala could be a very loved lineup 

I think it has more to do with American tolerance for ride vs European desires.  Quite frankly every European I know has always criticized American MARKET mid and compact cars as soft riding. Not always in the negative,  but noticeable none the less.  That goes for an American Chevy,  Ford,  Honda or Toyota for that matter 

You are correct as Americans generally expect softer tunes. Product planners account for this. 

The bottom line is Opel has nothing that GM does not know or have.

[surreal1272]

1 hour ago, hyperv6 said:

I think you overestimate Opel an underestimate GMNA.

also anyone of value woul be moved. We saw that with Holden.

Keep in mind the only thing limiting GMNA is the choices they make. The Cobalt and HHR were not well sorted suspensions but the were given to Mark Stielow to sort out. Both became world class cars. Mark also is behind the Z/28 and I believe the new ZL 1. 

The key to better suspension engineering is in he hands of the product planners not Opel engineers. 

Diesels account for so little and much it is shared development anyways some with PSA.

As we have seen many of GM cars are tune well in standard form even with ot the extra badging. 

The seceret is less spring, better dampers, moderate bars and right sized tires.

In the past a F41 suspension was bigger tires, stiffer springs and big bars with little in the way of better dampers. 

Today they know less is more and you do not a stiff suspension off the Warren black lake. 

Inused to work with Mark and he is a world class chassis engineer. He is overseeing more and more and the lack of Opel is not going to be the impact some think. 

You do not need to be German anymore to turn corners.

You are correct as Americans generally expect softer tunes. Product planners account for this. 

The bottom line is Opel has nothing that GM does not know or have.

As someone who's wife currently owns an HHR LT (the 2.4L), I have to disagree with your "world class cars" assessment. A decent car with a decent engine and cargo room? Yes. World class? Not even close (electrical gremlins abound). I do agree with your handling reference but Opel has been very useful (see Buick) for GM and does make them money in other areas, even though they struggle with actual European sales. Just my opinion though.

[hyperv6]

2 hours ago, surreal1272 said:

As someone who's wife currently owns an HHR LT (the 2.4L), I have to disagree with your "world class cars" assessment. A decent car with a decent engine and cargo room? Yes. World class? Not even close (electrical gremlins abound). I do agree with your handling reference but Opel has been very useful (see Buick) for GM and does make them money in other areas, even though they struggle with actual European sales. Just my opinion though.

Sorry as a Owner of a HHR SS tuned by Mark Stielow of the GM Performance division that one is world class. Sorry I left off the SS. The F5 suspension carried the HHR SS to a class record at the ring and the Cobalt SS with in 2-3 seconds of a 5th Gen Camaro SS lap and still have excellent ride quality. 

The suspension in the Cobalt SS and HHR SS is night and day over the stock. I agree the stock is decent but not world class by any means. 

As for my comments World Class has nothing to do with the rest of the vehicle. As for electric and other issues I have not had any to this point. 

The bottom line on Opel at this point is there is nothing on a Regal that could not be done in Warren to gain the same results. Opel holds no secret codes to suspension tuning. They just tune to their market and then soften it a bit for ours. Daewoo also has a lot to do with many of these vehicles too as all branches work on them. 

It is a common sight to see a Opel in Michigan in Warren testing too. 

 

I think you will see with the ever slowing growth in the auto industry you will see more targeting of large markets and greater growth areas.

The problem today many markets are just not flat profitable and even if you go global for some it is still not worth the investment when you can make develop a model or two and sell just as many cars in larger market and make twice the money.

 

Europe is becoming much like California. High taxes to pay for all the social programs. Heavy government regulations that hinder doing business and MFG.

Countries going bankrupt and other countries unable to do what they feel is best for them because a Euro Union tells them what they can or can’t do.

 

Doing business in Europe is difficult right now and will become even more difficult to expand a company.

 

Many large cities are wanting to heavily tax cars driven in town like London. Then you have cities like Paris that want to restrict the age of a car driven in town. Then some just want to eliminate cars all together or go all electric.

 

So GM has few options here as making Opel profitable would be difficult even if they started just selling rebadged VW’s. They need to find a way to make Opel profitable or at least not unprofitable to them. And that means it could be a joint venture, complete sale or a sale and then buy back.

 

Either way GM can survive with or without Europe. If you do not believe that then notice they have survived Europe with constant losses for how many years. Just not losing money would be an improvement.

 

[Robert Hall]

I've had Cobalts and HHRs as rentals in the past, nothing remotely 'world class' about their interiors, even 10 years ago...cheap, hard nasty plastics.....they were cheap, disposable econoboxes for their day, nothing special.  Anyone who thought those were 'world class' must never have experienced much of the world.. (j/k)

Edited February 19, 2017 by Cubical-aka-Moltar

[surreal1272]

2 hours ago, hyperv6 said:

Sorry as a Owner of a HHR SS tuned by Mark Stielow of the GM Performance division that one is world class. Sorry I left off the SS. The F5 suspension carried the HHR SS to a class record at the ring and the Cobalt SS with in 2-3 seconds of a 5th Gen Camaro SS lap and still have excellent ride quality. 

The suspension in the Cobalt SS and HHR SS is night and day over the stock. I agree the stock is decent but not world class by any means. 

As for my comments World Class has nothing to do with the rest of the vehicle. As for electric and other issues I have not had any to this point. 

The bottom line on Opel at this point is there is nothing on a Regal that could not be done in Warren to gain the same results. Opel holds no secret codes to suspension tuning. They just tune to their market and then soften it a bit for ours. Daewoo also has a lot to do with many of these vehicles too as all branches work on them. 

It is a common sight to see a Opel in Michigan in Warren testing too. 

 

I think you will see with the ever slowing growth in the auto industry you will see more targeting of large markets and greater growth areas.

The problem today many markets are just not flat profitable and even if you go global for some it is still not worth the investment when you can make develop a model or two and sell just as many cars in larger market and make twice the money.

 

Europe is becoming much like California. High taxes to pay for all the social programs. Heavy government regulations that hinder doing business and MFG.

Countries going bankrupt and other countries unable to do what they feel is best for them because a Euro Union tells them what they can or can’t do.

 

Doing business in Europe is difficult right now and will become even more difficult to expand a company.

 

Many large cities are wanting to heavily tax cars driven in town like London. Then you have cities like Paris that want to restrict the age of a car driven in town. Then some just want to eliminate cars all together or go all electric.

 

So GM has few options here as making Opel profitable would be difficult even if they started just selling rebadged VW’s. They need to find a way to make Opel profitable or at least not unprofitable to them. And that means it could be a joint venture, complete sale or a sale and then buy back.

 

Either way GM can survive with or without Europe. If you do not believe that then notice they have survived Europe with constant losses for how many years. Just not losing money would be an improvement.

 

Sorry but one top level trim car does not make it the car "world class". Yes, they are quick, and I glad you clarified that (regarding the performance) but that is about all they have going for them (especially the Cobalt). Fact is that the HHR lineup overall is anything but "world class" when it takes a top level trim car like the SS to even get rear disc brakes. Again, I'm not saying it's a bad car overall. My wife's has been a good little car but it hasn't been without its little issues (mostly electrical). These were all things that were pretty easy for me to fix but many of them should not have happened in the first place. For all of it's performance, the SS suffers from many of the same electrical issues. Again, just my opinion. 

 

And yes, the Europe situation is just a mess.

Edited February 19, 2017 by surreal1272

[hyperv6]

17 minutes ago, surreal1272 said:Sorry but one top level trim car does not make it the car "world class". Yes, they are quick, and I glad you clarified that (regarding the performance) but that is about all they have going for them (especially the Cobalt). Fact is that the HHR lineup overall is anything but "world class" when it takes a top level trim car like the SS to even get rear disc brakes. Again, I'm not saying it's a bad car overall. My wife's has been a good little car but it hasn't been without its little issues (mostly electrical). These were all things that were pretty easy for me to fix but many of them should not have happened in the first place. For all of it's performance, the SS suffers from many of the same electrical issues. Again, just my opinion. 

 

And yes, the Europe situation is just a mess.

 Am only speaking of the handling sine that was what we were speaking of. 

Look I am not going to argue with you so let me make this clear so you can find something more important to argue about.

#1 The HHR SS and Cobalt SS are not world class cars in their full form.

#2 The said vehicles do have world class handling in SS form with the F5 suspension though not making the entire car world class in themselves.

#3 My entire point was to show GM at the Michigan tech center can take a lowly basic econo car and make it handle so very well that it would equal anything done by the Opel staff. 

#4 I just stated I have not had electrical issues, lucky maybe but all the same it was not a problem for me.

#5 My SS has been great. I got it at a low price new and have enjoyed it. I am looking to sell it this year and replace it with a ZR2. While I am looking forward to the new truck I will miss my SS. My buddy just sold his with many stone chips, broken windshield and more miles for $10,000 so I expect to get a decent price for mine in near showroom condition. 

So let's Sumerize here just to make sure you get what my point was. 

Entire car is not world class. The SS handling is world class. The SS suspension is an example of GM USA ability to take even a basic old platform and match Opels abilities. 

Finally we have established you wife's cars electrical suck. 

If I have missed something just re read 1-5 again.

We agree on Europe.....High Five!

 

2 hours ago, Cubical-aka-Moltar said:

I've had Cobalts and HHRs as rentals in the past, nothing remotely 'world class' about their interiors, even 10 years ago...cheap, hard nasty plastics.....they were cheap, disposable econoboxes for their day, nothing special.  Anyone who thought those were 'world class' must never have experienced much of the world.. (j/k)

I am peaking of the suspension on the SS please read 1-5 above. This was why I only was speaking of Lap times not interior comfort.

Yes the interior sucked.

[Drew Dowdell]

It's simple. Malibu tuning Vs. Regal tuning. Regal tuning is much better and, not counting the GS, there is nothing particularly more expensive about the Regal hardware.

[hyperv6]

33 minutes ago, Drew Dowdell said:

It's simple. Malibu tuning Vs. Regal tuning. Regal tuning is much better and, not counting the GS, there is nothing particularly more expensive about the Regal hardware.

I get what you mean but the difference was not German vs American engineering. The difference was choice of tuning by the divisions. Both coul make the others cars if they so choose. Chevy targets a softer ride as do the Asian makers for cars in the states unless they designate it a sport model.

My point is Chevy chooses to be more American in product and if Buick wants to carry on the Euro tuning they do not need Russelsheim to get the same results. Odds are if it is a clean break the key staff will be moved anyways. GM will not lose people they want to keep.

The only real loss here if it is a clean break is a model like the Wagon that needs the Euro sales to survive here. But even then that will be a small number of wagons. To me it is sad if it should happen as this is one wagon that would be worth having. But we still may get it as it very well may not be a clean break.

The bottom line is GM here coul make anything Opel has done and then some. It just comes down to product planners choosing it.