Andy
05-04-2009, 07:57 PM
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Bologna, Italy - I'm here on a Maserati drive, taking in all the European press on Sergio Marchionne's bid to take some majority proportion of Opel. Here, the big story is, What the ...? After picking up minority interest in Chrysler LLC, Marchionne has said he wants to build an uber-automaker (or whatever the Italian word for "uber" is) consisting of Fiat Auto (which, remember, does not include Ferrari), Chrysler and General Motors' Opel/Vauxhall.
Back in Detroit last Monday, CEO and President Fritz Henderson spoke about selling a portion of Opel, which he ran before he returned to the U.S. to become Rick Wagoner's number-two a couple of years ago. Henderson intimated that GM would sell a portion of Opel/Vauxhall (which for our purposes, I'll call "Opel" from now on) and that it would remain GM's volume middle-priced brand in Europe, where the GM also has Chevrolet and Saab. Yes, he included Saab, which is in bankruptcy court in Sweden and where it will remain a GM premium brand -- at least for now. Henderson has said GM won't provide Saab with product past the end of this year.
Back in the late '70s, when Chrysler got federal government loans, it agreed to curtail overseas operations in favor of employing U.S. and Canadian workers. This resulted in Chrysler's biggest problem; that it's a regional, and not global, automaker. Why would GM want to follow suit?
Henderson's answer was that it wouldn't, because of that Chevy-Opel-Saab strategy. Cadillac is out of the picture in Europe, because GM doesn't have the money to fund new diesel engines and small, rear-drive cars. I can't explain the Saab answer, but we'll just have to assume that if Marchionne wants all of Opel, he won't necessarily get it.
Still, today's headlines are that "Fiat is in talks to buy GM's Opel." Not a portion of it. Marchionne is not proposing an alliance. And if he's getting 20-percent of Chrysler by trading facilities and technology without putting out any money, how much is Fiat willing to pay for Opel? Of course, Fiat is after any help it can get from the German government.
This leaves Chevrolet, which Henderson says is the "fastest growing" brand in Europe. But that's mainly Eastern Europe and Russia, not the richer Western European countries. And like Western Europe, Eastern Europe and Russia have dried up as a result of the global recession. Another potential buyer for Opel has been Magna International, the parts supplier that owns European assembler Magna-Steyr.
Henderson also pointed out that Opel has been a bright spot in GM's recent financial results. The company generally makes money, and has had successes like the new Insignia sedan. So again, why sell it, especially when GM isn't likely to come away with much cash from it?
Furthermore, GM issued a press release today saying that it is still in talks with parties interested in Saturn. The release noted that Saturn has one of the newest lineups in the business, including the Sky, which shares its platform with the Pontiac Solstice, which of course doesn't have much time left itself.
And if GM does get into bed together with Fiat over Opel, it will be a nice, ironic twist to talks the two automakers had early in the decade, which resulted in GM paying more than $2 billion so it wouldn't have to buy Fiat. That deal still stands as the poster child for why GM is in an economic mess. The only thing that came out of that proposed alliance was Fiat's "premium" front-drive platform (for bigger Alfa sedans), which GM hasn't used.
We'll know better by the end of the month, when GM either reorganizes with federal loans or files for Chapter 11 reorganization why, exactly, Henderson is playing these games. I hope he's not looking to sell all, or even most, of Opel to Fiat for a relatively small, short-term financial gain.
More... (http://blogs.motortrend.com/6509263/editorial/what-the-gm-selling-opel-to-fiat-is-a-bad-idea/index.html)
Bologna, Italy - I'm here on a Maserati drive, taking in all the European press on Sergio Marchionne's bid to take some majority proportion of Opel. Here, the big story is, What the ...? After picking up minority interest in Chrysler LLC, Marchionne has said he wants to build an uber-automaker (or whatever the Italian word for "uber" is) consisting of Fiat Auto (which, remember, does not include Ferrari), Chrysler and General Motors' Opel/Vauxhall.
Back in Detroit last Monday, CEO and President Fritz Henderson spoke about selling a portion of Opel, which he ran before he returned to the U.S. to become Rick Wagoner's number-two a couple of years ago. Henderson intimated that GM would sell a portion of Opel/Vauxhall (which for our purposes, I'll call "Opel" from now on) and that it would remain GM's volume middle-priced brand in Europe, where the GM also has Chevrolet and Saab. Yes, he included Saab, which is in bankruptcy court in Sweden and where it will remain a GM premium brand -- at least for now. Henderson has said GM won't provide Saab with product past the end of this year.
Back in the late '70s, when Chrysler got federal government loans, it agreed to curtail overseas operations in favor of employing U.S. and Canadian workers. This resulted in Chrysler's biggest problem; that it's a regional, and not global, automaker. Why would GM want to follow suit?
Henderson's answer was that it wouldn't, because of that Chevy-Opel-Saab strategy. Cadillac is out of the picture in Europe, because GM doesn't have the money to fund new diesel engines and small, rear-drive cars. I can't explain the Saab answer, but we'll just have to assume that if Marchionne wants all of Opel, he won't necessarily get it.
Still, today's headlines are that "Fiat is in talks to buy GM's Opel." Not a portion of it. Marchionne is not proposing an alliance. And if he's getting 20-percent of Chrysler by trading facilities and technology without putting out any money, how much is Fiat willing to pay for Opel? Of course, Fiat is after any help it can get from the German government.
This leaves Chevrolet, which Henderson says is the "fastest growing" brand in Europe. But that's mainly Eastern Europe and Russia, not the richer Western European countries. And like Western Europe, Eastern Europe and Russia have dried up as a result of the global recession. Another potential buyer for Opel has been Magna International, the parts supplier that owns European assembler Magna-Steyr.
Henderson also pointed out that Opel has been a bright spot in GM's recent financial results. The company generally makes money, and has had successes like the new Insignia sedan. So again, why sell it, especially when GM isn't likely to come away with much cash from it?
Furthermore, GM issued a press release today saying that it is still in talks with parties interested in Saturn. The release noted that Saturn has one of the newest lineups in the business, including the Sky, which shares its platform with the Pontiac Solstice, which of course doesn't have much time left itself.
And if GM does get into bed together with Fiat over Opel, it will be a nice, ironic twist to talks the two automakers had early in the decade, which resulted in GM paying more than $2 billion so it wouldn't have to buy Fiat. That deal still stands as the poster child for why GM is in an economic mess. The only thing that came out of that proposed alliance was Fiat's "premium" front-drive platform (for bigger Alfa sedans), which GM hasn't used.
We'll know better by the end of the month, when GM either reorganizes with federal loans or files for Chapter 11 reorganization why, exactly, Henderson is playing these games. I hope he's not looking to sell all, or even most, of Opel to Fiat for a relatively small, short-term financial gain.
More... (http://blogs.motortrend.com/6509263/editorial/what-the-gm-selling-opel-to-fiat-is-a-bad-idea/index.html)