GM Europe Sale

[R-Design]

Originally Posted by Bossxr8

Where's GM going to get the $5 billion needed to restructure Opel.

I think GM China is making a killing; it's probably going to have to keep the Non-US operations afloat until they can become profitable.

[R-Design]

Originally Posted by AFP, November 6, 2009

Angry German workers protested on Thursday over General Motors' shock refusal to sell its European unit Opel and plans to cut 10,000 jobs, moves slammed as a slap in the face for Chancellor Angela Merkel.

GM wants to slash costs by 30 per cent at Opel, which would mean the elimination of about one-fifth a workforce of around 50,000, GM vice president John Smith told a telephone news conference.

"Opel - the big -take," screamed the front-page headline of the mass-selling Bild newspaper. "The Americans duped everyone."

The company warned employees and unions that it could still allow Opel to flounder if the workforce upholds its threat to refuse wage concessions - a move blasted as "blackmail" on Thursday by the German daily Sueddeutsche Zeitung.

It estimated it would need 3 billion euros ($A4.9 billion) in state aid, and was nevertheless confident it could secure the sum from Germany and other European countries where Opel and the British Vauxhall unit have plants.

The announcements came a day after GM, which was struggling with a bankruptcy reorganisation backed by the US and Canadian governments, stunned the auto sector by abandoning the agreed plan to sell Opel to Canadian auto parts manufacturer Magna and state-owned Russian bank Sberbank.

It said it would restructure the unit itself, just hours after an unwitting Merkel gave a historic speech before a joint session of the US Congress and held talks with US President Barack Obama.

"It is truly tragic," wrote the Berlin daily Der Tagesspiegel, calling the decision a "stinging slap in the face" for the chancellor.

"On the same day Merkel enjoyed her great triumph she also experienced her worst embarrassment. It's a disaster for German-US relations."

Obama's spokesman insisted his government had nothing to do with the about-face. But the Sueddeutsche newspaper was sceptical.

"Perhaps Obama genuinely wasn't in the picture when he received Merkel in the White House, although this doesn't say much for him," it said.

"Perhaps he did know something, and that would put him in an even worse light. In any case, with their inconstancy the GM managers have caused serious damage to German-US relations."

Merkel's government had invested major financial and political capital in saving Opel from insolvency before a September general election which she handily won.

Beyond pledging 4.5 billion euros in state aid for the ailing company, Berlin spent months shepherding a rescue deal.

About half the company's employees work in Germany and although Magna had said it would cut around 10,500 jobs, Berlin had been confident that most of the German staff would be spared.

On Thursday, thousands of protesting workers at four Opel plants feared the worst. Powerful trade union IG Metall said it expected 10,000 staff to take part ahead of European-wide work stoppages Friday.

"We as the state will not just stand by with our arms folded," powerful Hesse regional premier Roland Koch told a rally at the main German Opel plant in Ruesselsheim, saying he would join forces with the federal government in future negotiations with GM.

"We make good cars in Germany and we want to keep doing that in future."

http://www.drive.com.au/Editorial/Ar...eID=67061&vf=7

[vztrt]

Forster quits as GM begins new Opel era

http://www.goauto.com.au/mellor/mell...257668007D5092

GM Europe president steps down, with Lutz and Reilly tipped to oversee Opel/Vauxhall

9 November 2009

By TERRY MARTIN

GENERAL Motors is now searching for an executive to lead its European operations Opel and Vauxhall – two brands it last week decided not to sell to a consortium led by car parts giant Magna International – after Opel Europe president and GM group vice-president Carl-Peter Forster tendered his resignation.

Reports out of the US this week suggest GM’s international operations president Nick Reilly will temporarily replace Mr Forster.

Mr Reilly is a former plant director at Vauxhall’s Ellesmere Port plant in England and one-time president of GM Asia-Pacific – a portfolio that included Holden. He oversaw the re-organisation of Korean car-maker GM Daewoo after the GM take-over in 2002.

He now effectively manages GM’s entire operations outside North America.

In a statement, GM said Mr Forster – who was in favour of the Magna deal – would remain an adviser during the transition to find a new chief executive. Other unconfirmed reports indicate that Bob Lutz will become chairman of Opel’s supervisory board (of which he is already a member) and play a crucial role in a restructuring plan that will soon be announced.

Thousands of jobs are expected to be cut.

As GoAuto has reported, GM revealed last week that it had decided, after months of negotiations, to abandon plans to sell 55 per cent of its European operations to Magna and partner Sberbank.

With Mr Forster’s departure, GM said it will initiate “an immediate external search” for a replacement and that it will “work with Opel leadership, in consultation with representatives of the European Employees Forum, in moving forward with a plan that will build a strong and enduring future for the Opel/Vauxhall brands”.

“The Opel brand has made tremendous progress under Carl-Peter’s tenure and leadership over the past several years,” said GM president and CEO Fritz Henderson. “We thank him for his significant accomplishments and wish him only the best in the future.

“In the meantime, we’re confident that the key personnel leading Opel will stay focused on running the business during this time of transition.”

Mr Henderson said GM expected to finalise its proposals for establishing Opel/Vauxhall’s future this week and “will be engaging all stakeholders to see how we can best work together in achieving our mutual goals”.

“We will update on our progress as soon as is possible,” he said, adding that no other management changes to the Opel Europe organisation were being considered “at this time” and that all key management roles will remain as the search for a replacement commences.

For his part, Mr Forster said: “The past few years building the Opel brand has been a tremendous personal opportunity. We’ve seen great strides in design, quality and technology and the launch of truly world-class products.

“It’s been an honour to be part of the history of Opel, and I wish all the people with the organisation only the best in what I’m certain will be a great future.”

In an informal discussion with journalists last week before Mr Forster’s resignation announcement, Mr Henderson refused to be drawn on the number of jobs that GM will now cut in Europe and the extent to which it will downsize its Opel/Vauxhall operations.

“In terms of the number of people, basically we’re going to go through this with our people first before we go into it with you,” he said. “All of the plans, again, whether it was ours or whether it was Magna’s, called for a substantial reduction in capacity in the business and the need to right-size the workforce.

“I just don't think it’s fair, and not something that I should do this morning, to go into what is the number and where. It’s really something we should do with our people first.”

[Wally]

This was a current topic while I was in Europe. The distinct impression is that the govts consider Vauxhill and Opel should remain as European icons and will provide assistance to ensure that happens.

[vztrt]

GM may go it alone on $5.3 billion Opel revamp

http://www.goauto.com.au/mellor/mell...25766D001C1601

German minister tells GM not to count on its aid in Opel rescue mission

13 November 2009

By RON HAMMERTON

GENERAL Motors might go it alone in restructuring its European Opel-Vauxhall unit, without aid from a reluctant German government.

German economy minister Rainer Bruederle told German TV that interim head of GM Europe Nick Reilly and GM vice-president John Smith this week had told him the company could shoulder the financial cost of the re-organisation, which GM has previously estimated at €3.3 billion (A$5.3b).

But Reuters reported that Mr Bruederle told the GM executives at their meeting in Germany that the US company would not be able to count on German government support for the overhaul of Opel “for the time being”.

“I expressed my expectation that General Motors should basically carry out the financing itself,” Mr Bruederle was quoted as saying.

The German government is reportedly angry with the back-flip by GM on the planned sale of Opel to Canadian parts maker Magna International.

Germany had offered €4.5 billion ($A7.2b) in aid to Magna and its Russian investment partner Sberbank, but appears reluctant to offer any such aid to GM after it decided at the 11th hour last week to keep Opel in the GM fold.

However, Mr Bruederle left the door slightly ajar, saying any company could apply for government assistance.

GM has yet to say if it will officially apply for aid, saying only that it could cut Opel’s fixed costs for a third of the price to taxpayers that Magna was charging.

German automotive unions fear up to 10,000 jobs will be lost in the shake-out. They have announced they will not negotiate with GM until it has laid out its plans for Opel until 2014.

Opel’s German rivals also have been critical of the prospect of any bailout, with the bosses of both Daimler and Volkswagen speaking up on the subject.

Daimler chairman Dieter Zetsche told reporters in New York that the restructuring of Opel was GM’s problem.

“That should not be a problem of the German state,” he said.

Volkswagen CEO Martin Winterkorn told an automotive awards ceremony in Germany that GM was right to keep Opel but it should fix the company without state help.

“When things are bad, it’s the parent company’s task to help the daughter company,” he said.

Mr Winterkorn, whose company has not only supported VW’s loss-making Spanish subsidiary SEAT but also helped to salvage Porsche, made his statement while seated next to Opel’s former chairman Carl-Peter Forster, who resigned last week and was replaced by Mr Reilly.

English-born Mr Reilly will retain his current role as president of GM international operations, based in Shanghai, while he oversees the Opel revival.

Meanwhile, GM is searching for a permanent CEO for GM Europe.

In the UK, the decision by GM to retain Opel and Vauxhall was more warmly welcomed than in Germany, as workers at Vauxhall’s Ellesmere Port factory fancy their chances of retaining their jobs more under GM than Magna, mainly because Mr Reilly was once manufacturing director at the factory. He is even said to have taken a pay cut to help keep the factory alive during his stint there.

British business secretary Lord Mandelson said he was keen for "very early discussions with GM over their plans for the business and how they will affect British plants and workers”.

[vztrt]

http://www.caradvice.com.au/51754/op...in-four-years/

Opel’s European sales highest in four years

December 30, 2009 by Matt Brogan

New registrations of Opel cars hit their highest level in four years in 2009 as government-backed scrapping incentives bolstered a floundering European auto industry.

The German government paid owners €2,500 (AU$4,000) to scrap cars that were at least nine years old if they replaced them with a new car.

New registrations of Opel cars in Germany rose 31 per cent (or approximately 339,000 units) in 2009, boosting the company’s market share in the country to about 8.9 per cent.

The news comes as Opel readies a €3.3 billion (AU$5.28 billion) overhaul that will see it cut 8,300 of its 50,000 jobs and seek state aid from countries with Opel plants including Germany, Britain, Spain and Poland.

[vztrt]

Opel shuts Antwerp factory

http://www.goauto.com.au/mellor/mell...2576B200839BF7

GM wields the axe on Belgian Astra plant as it finally begins European restructuring

22 January 2010

By RON HAMMERTON

THE first shoe has dropped in General Motors’ restructuring of its European operations, with Opel confirming that it will close its 85-year-old Antwerp plant, in Belgium, this year at a cost of 2300 jobs.

A further 6000 jobs are set to go across the Opel-Vauxhall operation as GM strives to pull its European arm out of the red by cutting costs and shedding excess capacity after pulling out of its deal to sell the European operations to a consortium led by parts maker Magna International with Russian bank Sberbank.

The widely anticipated decision to close the Antwerp plant, which makes the Astra, was announced by Opel CEO Nick Reilly who indicated GM had agonised over the decision.

“We fully understand the effect this announcement has on the Antwerp employees and their families and we sympathise with them,” he said.

“Many have been dedicated to the plant over generations and have done an excellent job producing great quality cars.

“The decision to announce this today, was not taken lightly; instead, it is the unfortunate result of the current business reality.

“We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations.”

In its statement announcing the closure, GM painted a gloomy picture of the immediate future for the European car market, which it said would continue to decline by a further 1.5 million vehicles this year.

“It is not expected to return anytime soon – if ever – to these peak levels, resulting in significant overcapacity in general and at Opel in particular,” GM said.

“To ensure long-term sustainability for the company, Opel needs to reduce capacity by approximately 20 per cent.

“In view of current capacity utilisation at all European Opel and Vauxhall plants, planned future product portfolio, timing requirements and financial impact, winding down the Antwerp plant would be the most logical approach for the company. If confirmed, production would conclude in the next few months.

“It is expected that the full restructuring plan, when completed, will affect all Opel and Vauxhall production sites and entities through such measures as capacity reductions, job redundancies and labor cost reductions.”

About half of the 8300 jobs to be shed by Opel-Vauxhall are expected to come from Germany where Opel has four plants and a large administration and technical centre at Russelsheim.

Terms of the Antwerp plant closure now have to be negotiated with labour unions. GM has offered to introduce training programs and assistance to find a new investor for the site.

GM has been making cars at Antwerp since 1925 when Chevrolets rolled down the line there. Since then, it has made more than 13 million cars at the factory, building nine per cent of Opel production at its peak.

In 2007, it made almost 200,000 Astras, but the global financial crisis depressed that to fewer than 90,000 last year.

Opel has two other left-hand-drive Astra factories, in Germany and Poland, while Vauxhall makes right-hand-drive Astras at Ellesmere Port, in England.

In a recent letter to Opel-Vauxhall employees, Mr Reilly said he wanted the company to be known as “a leading European manufacturer of high quality, desirable automotive products, based on German engineering” and “respected around the world”.

“To be winners again we need to take bold decisions, but it’s also important to recognise where we don’t lead,” he said.

“We’re missing an entry in the ‘mini’ segment, we don’t have an identified successor for the Combo light van, we’re not leading in hybrids or pure electric vehicles and our traditional powertrains have mixed performance in fuel economy, CO2 and driveability.”

Mr Reilly, who once managed GM Asia Pacific, whose zone included GM Holden, said Vauxhall-Opel would look much more closely at the numbers in future.

“We can’t afford to have any country or any product losing money in the long-term,” he said.

He also indicated that Opel-Vauxhall would more often go its own way on product design, saying the “focus on global platforms and parts sharing had gone too far – and that there needs to be greater respect for local customers’ needs”.

“Our design and engineering people need to ensure there is Opel-Vauxhall DNA in every car we sell,” he said.

“But we should still take maximum advantage of being a member of a leading global automotive family. We’re better for being part of GM and GM is better for having Vauxhall and Opel.”

[vztrt]

http://www.caradvice.com.au/54490/ge...00-jobs-to-go/

General Motors’ Opel to close Antwerp factory, 8300 jobs to go

January 25, 2010 by Tim Beissmann

General Motors’ European sibling company Opel will close its assembly plant in Antwerp, Belgium, by the middle of the year.

Forced to downsize after GM lost US$88 billion (AUD$97.4 billion) between 2005 and 2008, Opel CEO, Nick Reilly, said attempts by GM to find an alternative to closing the Antwerp factory were unsuccessful.

“In order to keep Opel going and have a sustainable future we have to take some of these types of decisions.

“You have to face reality. We are losing money and have to do something about it,” he said.

Unless an alternative is presented through union negotiations the closure process is expected to be completed by June or July with the view to eventually sell the land.

Mr Reilly earlier turned down what was effectively a 500 million euro ($783 million) offer from the Belgian taxpayers to keep the plant alive, despite still requiring 2.7 billion euros ($4.2 billion) in state aid to keep Opel afloat.

The manufacturer’s European works council is refusing to back the restructuring plan and believes the plant closure is a “breach of contract” and will lead to millions in extra unnecessary expenses.

Reilly confirmed Opel is not considering any other closures in the short term, but admitted production capacity will be cut by around 20 percent and around one-sixth of the company’s 50,000 employees would face the axe.

He said 4000 of the 8300 planned job cuts were expected in Germany.

(with Automotive News)

[vztrt]

Opel’s massive makeover to cost $16.8 billion

http://www.goauto.com.au/mellor/mell...2576CD00261F34

GM Europe set to splurge on new models – and some might make it to Oz

17 February 2010

By RON HAMMERTON

A FIVE-YEAR €11 billion ($16.8b) overhaul of Opel announced by General Motors this week might pave the way for the restoration of European-made models to GM Holden’s line-up.

Announcing the massive re-working of GM’s European operations in the wake of the aborted sale to Magna International, Opel chief executive officer Nick Reilly said one of Opel’s goals was to build exports to the Middle East and Asia-Pacific.

“Several studies are under way to look at possible profitable export programs in the Middle East and Asia-Pacific,” he said.

Holden, which dumped costly European models such as the Astra, Corsa-based Barina and Vectra from its range in favour of cheaper Korean-sourced cars such as the Cruze and Epica, says it has no immediate plans for new European models.

However, spokesperson Kate Lonsdale told GoAuto that Holden product planners looked at all models offered by GM, and would consider them if they were a good fit and made a good business case.

She added: “They (GM Europe) have some really exciting product coming out of there.”

Cost cuts are a cornerstone of the Opel-Vauxhall restructuring program outlined by Mr Reilly, who hinted that “growth markets” would be targeted by the new leaner Opel-Vauxhall.

He said the company would ask European governments for €2.7 billion in loans or loan guarantees, with the rest of the money to be found by GM.

Part of the money will be used to cut production capacity by 20 per cent and shed 8300 manufacturing and white-collar jobs, with more than 2000 coming from the closure of Opel’s Antwerp plant.

Half of the job losses will fall in Germany – a situation that has riled trade union IG Metall, which represents most German auto workers

The union immediately condemned the plan on Tuesday, refusing to contribute wage concessions and recommending German state and federal governments decline the aid request.

Vauxhall’s Ellesmere Port plant in England – once thought to be high on the list of possible casualties under a Magna restructure – escaped any job losses at a manufacturing level.

Mr Reilly, who once was a manager at Ellesmere Port, said GM Europe intended to build a European company that was profitable, self-sustainable and fit for the long-term.

“This keeps a manufacturing base in Europe,” he said “It is good for Europe, good for our employees and good for our customers. We therefore trust that the plan will be supported by our employees.”

Mr Reilly said the plan would reinvigorate 80 per cent of Opel/Vauxhall carlines by 2012 and place a strong emphasis on alternative powertrains.

The refreshed models include eight major launches in 2010 – including the second-generation Meriva people-mover, Corsa light car, Movano van and Astra Sports Tourer – and another four in 2011, most notably the plug-in hybrid Ampera, the European version of the Volt.

Mr Reilly pledged to spend €1 billion on innovative and fuel-efficient powertrain technology as it introduces a range of new green products.

These included an extended-range electric vehicle in addition to the Ampera – a vehicle that is set to make its debut in concept form at this year’s Geneva motor show in March.

Opel would also push ahead with pure battery-electric vehicles in smaller-size segments, while expanding LPG and CNG applications, idle-stop technology and “right-sizing” of engines.

“In addition, the company has accelerated efforts to introduce an entry in the sub-Corsa segment and to make a strong push in the light commercial vehicle business,” Mr Reilly said.

Mr Reilly promised a sharper product focus on a newly-refined Opel “DNA” – a brand strength that he hinted would not be allowed to be diluted by influence from Detroit.

“Opel/Vauxhall has a clear vision: to be a leading European manufacturer of high quality, desirable automotive products, based on German engineering, driven by a united team of professionals and respected around the world,” he said.

“This vision will be realised by offering an exciting and expanded product portfolio based on a strategic push into alternative propulsion technology.

“In order to support this vision, the company has sharpened and refined its brand DNA and product pillars, and is embarking on a program that ensures this DNA is engrained in every future Opel-Vauxhall product.

“Future products will be developed in Rüsselsheim at the International Technical Development Centre.

“If they are based on a vehicle architecture developed elsewhere, they will return to Rüsselsheim early to ensure they deliver on the Opel/Vauxhall brand promise.”

[vztrt]

http://www.caradvice.com.au/57918/ge...lac-in-europe/

General Motors distribution network to relaunch Cadillac in Europe

February 23, 2010 by Tim Beissmann

Almost one year after its European distributor, Kroymans, declared bankruptcy, Cadillac is set to be relaunched in key European markets through a sales and service network operated by parent company General Motors.

General Motors Europe has been handling sales of the CTS and CTS-V from its Zurich offices since the Kroymans collapse in March, but Cadillac general manager, Brian Nesbitt, said it was necessary for the brand to have a proper distribution network.

“Europe is an important market for Cadillac. Re-establishing distribution of our premium offerings is good news for those who seek import exclusiveness,” he said.

Cadillac is stepping up its European assault with a wide range of vehicles set for the stands of next week’s Geneva Motor Show.

The CTS coupe will make its European debut before going on sale in the second half of the year.

The already available CTS and CTS-V will be joined by the CTS Sport Wagon, which is due for release later in 2010.

Also set to take to the stand is a redesigned version of the SRX crossover, which is expected to hit the streets sometime this year.

(with Automotive News)

[vztrt]

http://www.caradvice.com.au/58797/op...ake-some-time/

Opel restructuring decision could still take some time

March 1, 2010 by Matt Brogan

Opel CEO Mr Nick Reilly has told German newspaper Welt am Sonntag that the restructuring plan for GM’s European division could still take some time.

After a tough few months, Mr Reilly said GM will need time to convince all parties involved in the restructure that the current plan is the right one for Opel’s future, but that ultimately, GM will receive the support it needs to keep Opel moving forward.

Current plans indicate that Opel hopes to raise sales to 1.7 million units by 2015, an increase of some 500,000 units on last year’s figures.

[MethodX]

Hope they recover and do well.
As a former owner.

[vztrt]

http://www.caradvice.com.au/66519/ge...se-opel-plant/

General Motors to pay $572 million to close Opel plant

May 4, 2010 by Alborz Fallah

Having risen from the ashes of Bankruptcy, General Motors has announced that it will pay 400 million euros ($572 million) to cover the cost of termination benefits for the 2,600+ workers at its assembly plant in Antwerp, Belgium.

The factory which has made Opel cars for years is expected to close by the end of this year. The American company is looking at the possibility of selling the plant to an outsider investor by the end of September.

General Motors had previously indicated that it would sell its majority share holdings in Opel and Vauxhall, but has recently decided to perform a complete restructuring of the brands instead.

The new idea hasn’t gone down all that well with European governments and worker groups who are worried about thousands of workers who may soon be out of a job.

The $570 million agreement was reached last week. Reports suggest the majority of workers will take the benefits and leave the Antwerp plant before it closes, others may stay on till a new owner is found.

[vztrt]

http://www.caradvice.com.au/67491/op...sts-in-berlin/

Opel’s fate rests in Berlin

By Chris Anderson-Peters | May 13th, 2010

The German government’s Loan Guarantee Committee will meet to discuss Opel’s request for 1.5 billion euros in state aid.

Germany is the only major European country that has not approved aid to keep Opel and British sister brand Vauxhall afloat with money backstopped by taxpayers.

Germany has advised it will offer aid on the condition that proof the German based, GM Co. unit, did not fall into difficulty before summer 2008 as a direct result of the financial crisis.

Opel Deputy Chairman Klaus Franz, says PricewaterhouseCoopers, the economics ministry’s own independent expert, certified Opel was profitable until September 2008.

“The German government needs to act immediately because 120,000 jobs in Germany dependent on the carmaker are at stake,” Franz says.

Opel CEO, Nick Reilly, who expects a final answer from Berlin by the end of this month, says generous contributions from other main Opel countries likely Spain and the UK meant Germany may be on the hook for less than 1.3 billion euros.

Relations between Berlin and Detroit has been frosty since November when GM scrapped the sale, heavily favoured by Chancellor Angela Merkel, of a majority stake in Opel to Magna International Inc.

GM initially saw funding responsibility to its European subsidiary as completed once it paid back the remaining 600 million euros of an emergency loan from the German government, which Detroit needed to do by the end of November to regain 65 percent of the shares held by a trustee.

The U.S. carmaker realises Berlin will not lift a finger following November’s rift unless GM provides more of a commitment.

In March, GM said it would commit 1.9 billion euros in loans and even fresh capital to Opel.

[vztrt]

http://www.autoblog.com/2010/06/09/r...l-aid-request/

Report: German government rejects $1.3 billion Opel aid request

by Steven J. Ewing (RSS feed) on Jun 9th 2010 at 1:27PM

General Motors is hard at work restructuring its brands here in the U.S., but we mustn't forget about overseas divisions, like Opel, that still require some financial aid to get things up and running at full capacity again. As we reported last month, GM came to an agreement with Opel's German workers – labor heads have agreed to do without €1.26 billion in earnings over the next four years (approximately $1.59 billion), saying that the money is best saved for the development of Opel products.

Now, more bad news strikes as the German government has denied GM's request for €1.1 billion ($1.3 billion U.S.) in loan guarantees for Opel. Rainer Bruederle, Berlin's economy minister, told reporters that he is "confident that Opel has a good future without credit guarantees," though labor unions are less than pleased with the final decision. Opel works council chief Klaus Franz went so far as calling the perceived snub "shameful."

Still, GM is prepared to support Opel's restructuring with €1.9 billion in finances, though the automaker is hoping to seek out €1.8 billion in loan guarantees from different European governments, including the rejected €1.1 billion from Germany. Opel's restructuring is still taking place regardless of monetary support, but added financial aid would indeed help the process. Here's hoping.

[Source: AFP via Google]

[Deco28]

Originally Posted by vztrt

http://www.autoblog.com/2010/06/09/r...l-aid-request/

Bye Bye, German Jobs.

[vztrt]

German government would have given the money in a shot had Opel been sold off. They dont want GM wasting their money.

[vztrt]

http://www.goauto.com.au/mellor/mell...25773F00207AFB

GM stands firm in Europe after German loan rejection

Opel to continue model plans, including sub-light mini, despite $1.6b shortfall

11 June 2010

By TERRY MARTIN

GENERAL Motors’ European arm Opel has vowed to continue its new-model development program, including work on a sub-light mini-car, despite the German government this week rejecting the auto giant’s request for €1.1 billion ($A1.6b) in loan guarantees.

Opel/Vauxhall chief executive Nick Reilly said that it would suffer delays as a result of the government’s decision, but said key products would not be affected and that it would continue to work with state governments in Germany, all of which have Opel plants in their region, to make up 25 to 50 per cent of the required amount.

The €1.1 billion is a large slice of the overall €3.7 billion ($A5.3b) overhaul GM has identified as necessary for its European operations to return to profitability. It had planned to break even in 2011, and to return to profit by 2012.

Overseas reports indicate that Opel is also seeking €333 million ($A476m) in loan guarantees from the UK, €437 million ($A624m) from Austria and Spain combined, and €50 million ($A71m) in project financing from Poland.

GM was expecting to contribute €1.9 billion in US taxpayer funding, but that could now increase – or force cuts in other areas of operations.

The core part of Opel/Vauxhall’s so-called ‘plan for the future’ is the development and introduction of new models, including a new small car that sits below the Corsa compact hatch.

This is part of an €11 billion investment into new products, alternative propulsion systems and “other growth initiatives”.

“I am certainly intending to work out a plan that allows us to keep the major investments in our major new products – that is what is going to lead our success in the future," Mr Reilly said in a conference call, adding that the micro-car program was continuing according to plan and would be sourced out of Germany rather than South Korea.

“There may be some things that we might be able to delay a bit, or wait until we are generating more money ourselves, but not in terms of any of the major products.

“It is definitely my intent to maintain the major elements of our plan going forward – that is, the restructuring, but even more important than that, the investment we have in new product and new technologies.

“We clearly will have to look at the spending curve, and the availability of funding that we are going to end up with, and obviously I’ll be discussing this with our parent company.”

Mr Reilly said it was possible that GM could fund the shortfall itself, but indicated that this course of action would not be well received in the US and could in turn have ramifications on its operations in other markets.

Although he did not name a specific market, Holden’s Australian operations are obviously one of these.

“Could GM Company pay for the whole lot? In theory, it’s possible. But then they would have to do something else less in the US or elsewhere,” he said.

“You have to remember they (GM) are operating largely because of US taxpayers’ money, so they have to be very careful about what they spend outside the US in particular. They certainly didn’t expect to have to fund the whole lot, and that’s why we should be looking at all different funding options that are open to us.

“They will be one, but certainly not the only one.”

In announcing the German government’s rejection of the Opel loan guarantees, federal minister of economics and technology Rainer Bruederle said he was convinced GM had adequate financial resources to turn Opel/Vauxhall around, making a “conservative calculation” that it had free liquidity of about €10 billion, even after it had paid back credits from the US and Canadian governments.

“GM is economically much better off than a year ago,” Mr Bruederle said, adding that he was attempting to strike the “right balance” between market forces and state intervention.

“After the immense economic (aid) programs, each of which has incidentally Opel benefited doubly so, the pendulum must swing back towards the market.

“We have to move again in the proper courses of the social market economy. And market competition has to come into play much stronger again. The state economy will be pushed back. The state is not a better entrepreneur.”

Mr Bruederle also said that GM took on risk itself in rejecting the deal brokered by German chancellor Angela Merkel late last year to sell a majority stake in Opel to a consortium led by Canadian parts giant Magna International.

The other main reason behind the decision, he said, was that the “automotive market is characterised by significant overcapacity” and that “government support for a (particular) company leads to serious distortions of competition”.

“The guaranteed jobs at Opel jeopardises jobs at other companies in the industry. From the economic side, I am strongly against this threat of competition distortions,” he said.

GM needs the funding to continue with its restructuring program in Europe, which includes closing down its production plant in Antwerp, Belgium, and reducing Opel’s workforce by 8300, down from the current level of around 48,000 employees.

Some 4000 of these job cuts would be made in Germany.

In response, Mr Reilly said: “GM is naturally very disappointed, as is Opel, with this decision, after such a very long process and we have spent a lot of time answering many, many hundreds of questions (and) being reviewed by many, many different committees.

“I don’t particularly understand the reasons why. I understand that Mr Bruederle has said that it wasn’t an easy decision, and that some jobs might be at risk. He also said that he didn’t believe the state should get involved.

“That’s a difficult one for me to understand because countries and the EU have specific programs that have been approved by all the countries and by the EU to assist companies that have been affected by the global crisis.

“The other reason given was that support could lead to distortions in the automotive industry. Well, just last year alone, the European automotive industry received €8.5 billion from the EIB (European Investment Bank), which of course is a government-sponsored and government-financed institution and Opel received none of that. So I don’t understand that reason either.

“And then finally, I understand that (Germany believes) GM has enough money to restructure Opel. Well, in theory that’s probably true, but GM has lots of calls on its finances.

“It’s just coming out of bankruptcy from last year, and it has already committed €1.9 billion to the restructuring of Opel and towards our investment in new product, and what we are looking for is to get us through this period of low market so that we can keep investing in new products and our plants,” he said.

[vztrt]

http://www.caradvice.com.au/70743/gm...nment-support/

GM to fund Opel restructuring without European government support
By Tim Beissmann | June 17th, 2010

General Motors has withdrawn all applications for state aid from European governments and will now fund the restructuring of Opel on its own.



Opel CEO and head of GM Europe, Nick Reilly, said the company became frustrated with the slow-moving funding negotiation process and could no longer afford to hold off on its restructuring.

“We were led to believe that loan guarantees made available to other European companies under the EU program to help offset the impact of the global economic crisis would be equally available to Opel/Vauxhall. But, after a very long process defined by governments, this has turned out not to be the case.

“Our application was put in more than six months ago and we followed the process that the governments laid out and asked us to follow. We had no idea it would take this long,” Mr Reilly said, as reported by AFP.

GM announced in November 2009 that the restructuring of Opel would lead to job cuts of up to 8300 employees, 4000 of those to be in Germany.



The reorganisation is expected to cost around 3.3 billion euros ($4.7 billion) to finance, with plans to overhaul the Opel product line-up within five years. A statement from Opel said the company now had the opportunity to go forward and grow rather than remain weighed down by the troubles of its past.

“In these circumstances, and given the need to progress the plan quickly, it has been decided to fund the requirements internally. GM’s recently improved financial strength has also been a catalyst for making this decision,” it said.

GM had already agreed to contribute 1.9 billion euros ($2.7 billion) to the restructuring plan, and its decision to go it alone was heavily influenced by last week’s revelation that Germany would refuse to chip in around 1.1 billion euros ($1.6 billion).

Britain and Spain were reportedly prepared to commit around 330 million euros ($470 million) each in bank loans to assist in the restructuring plans.

(with Automotive News Europe, AFP)

[vztrt]

http://www.goauto.com.au/mellor/mell...2577440082A416

GM to fund Opel comeback ‘alone’

General Motors withdraws all applications for government loans in Europe

17 June 2010

By TERRY MARTIN

GENERAL Motors made a stunning reversal of policy on its European operations this week, announcing it had withdrawn all applications for government loan guarantees that were lodged to secure the future of its Opel and Vauxhall brands.

The shock move comes a week after the German government rejected the American auto giant’s request for €1.1 billion ($A1.6b) in loan guarantees, and after Opel/Vauxhall chief executive Nick Reilly told journalists he would work with state governments in Germany to make up part of the shortfall.

Mr Reilly also said last week that Opel would continue to negotiate with the UK, Austria, Spain and Poland for funding that would form part of the overall €3.7 billion ($A5.3b) GM had identified as necessary for its European operations to return to profitability.

The company had planned to break even in 2011, and to return to profit by 2012.

In a statement released this week, General Motors said the validity and reasons for requesting government loan guarantees had not changed, but “the process has proven to be much more complex and longer than anticipated and the results are still not finalised or certain”.

“In these circumstances, and given the need to progress the plan quickly, it has been decided to fund the requirements internally,” the company said.

“GM’s recently improved financial strength has also been a catalyst for making this decision.”

In the statement, Mr Reilly said he appreciated the support indicated by the UK and Spain in particular, but added “we need to move on”.

“The decision of the German government last week was disappointing and means that the conclusion of these guarantees is again likely to be months away,” he said.

“To be clear, our funding needs have not changed and we were led to believe that loan guarantees made available to other European companies under the EU program to help offset the impact of the global economic crisis, would be equally available to Opel/Vauxhall.

“But, after a very long process defined by governments, this has turned out not to be the case.

“We are grateful for the decision and support of our parent company, which will allow us to move forward with confidence in this very competitive industry. We cannot afford to have uncertain funding plans and new time-consuming complex negotiations at this time when we need to keep investing in new products and technologies.

“With these new products and the impact of restructuring, we expect to return to profitability shortly.”

New models in the pipeline include the Chevrolet/Holden Volt-based Ampera plug-in hybrid and an all-new sub-light micro-car that will sit below the Corsa compact hatch in the European product range.

The latter is a model Mr Reilly last week said was continuing according to plan, and would be built in Germany rather than the increasingly important GM Daewoo operations in South Korea.

He said some programs would be delayed as a result of the German government’s decision, but emphasised that key products would not be affected.

Mr Reilly, who in recent years has overseen GM’s operations throughout Asia, including Australia, also warned in the wake of the German rejection that the funding shortfall could threaten other GM operations elsewhere in the world.

“Could GM Company pay for the whole lot? In theory, it’s possible. But then they would have to do something else less in the US or elsewhere,” he said. “You have to remember they (GM) are operating largely because of US taxpayers’ money, so they have to be very careful about what they spend outside the US in particular. They certainly didn’t expect to have to fund the whole lot, and that’s why we should be looking at all different funding options that are open to us.

“They will be one, but certainly not the only one.”

GM’s announcement this week vindicates the funding rejection by the German government, which argued that the car-maker had enough liquidity – about €10 billion, based on a “conservative calculation” – to return Opel back to financial health, even after it had paid back credits from the US and Canadian governments.

As GoAuto reported, Germany’s federal minister of economics and technology Rainer Bruederle said last week that “GM is economically much better off than a year ago”.

“We have to move again in the proper courses of the social market economy, and market competition has to come into play much stronger again,” he said.

“The state economy will be pushed back. The state is not a better entrepreneur.”

[vztrt]

Opel may be sold here under Opel brand.

http://www.caradvice.com.au/81848/op...ate-to-holden/

Opel heading to Australia without Holden connection
By Brett Davis | August 31st, 2010

Recent reports circulating are saying the European Opel brand might be heading to Australia as a separate entity to Holden. Reports say Opel has made recent successful efforts in selling in parts of Asia prompting the company to think about expanding to greater Australasia.

Many Opel models have been brought to Australian shores in the past and rebadged as Holdens, such as the Barina/Corsa and the Vectra. Opel is apparently pursuing a more global stance by introducing its name and company into countries like China, South America and Australia, by offering ‘European’ design and heritage.

According to a recent Autoblog report, Opel sold 4000 cars in China, which sparked interest in the company providing further European designs and models to the country through a widespread dealer network. Andres Kroemer, an Opel spokesman was quoted as saying in the same report,

“We will market Opel as a European designed car in the premium segment. There are a growing number of Chinese who like European cars and have the money to afford them.”

Opel will head to China initially and then shortly after, South America and Australia. We wonder what sort of clash this will present for Holden, although, most small Holdens now come from Daewoo and American, General Motors subsidiaries.

[vztrt]

http://www.autoblog.com/2010/08/30/r...or-china-aust/

Report: Opel expanding outside of Europe, headed for China, Australia

by Jonathon Ramsey (RSS feed) on Aug 30th 2010 at 6:01PM

According to the latest reports, Opel will be taking its name, not just its cars, to at least four new markets around the world. Standard practice has been to rebadge Opels as one of General Motor's other brands in countries outside of Europe, but company heads believe it's time to market Opel's European roots, especially in China.

The German automaker sold 4,000 cars in China last year, and to that end, Opel spokesman Andres Kroemer says "We will market Opel as a European designed car in the premium segment. There are a growing number of Chinese who like European cars and have the money to afford them." By comparison, Audi, a luxury darling in China with local production facilities, sold more than 130,000 cars, and it's clear that Opel's launch will eventually be followed up by local production in China for better competitive footing.

In addition to joining the world's largest auto market, the Opel brand will head to Australia and South America in the near-term, as well as other Asian markets after that.

[Source: Deutsche Welle]

[Ghiadude]

Where does this leave holden? I know trying to compete with its european stablemate with cheap Korean imports....

[vztrt]

Originally Posted by Ghiadude

Where does this leave holden? I know trying to compete with its european stablemate with cheap Korean imports....

Ah but it'll be a european brand verses a Holden badge. The aussie car buyer isn't that smart.

[irlewy86]

It'll be intersting if it works. Might give a leg up to Mondeo/Focus, and other lower volume Euro's if GM sparks a Euro war on Australian soil.

[Joe5619]

Management at GM have not learnt one f'en thing!!! God hopes they are at least smart enough not to place the opel brand against Holden branded cars... After all opel is GM & Holden in GM!! They are just competiting against them self.

[R-Design]

Originally Posted by Joe5619

Management at GM have not learnt one f'en thing!!! God hopes they are at least smart enough not to place the opel brand against Holden branded cars... After all opel is GM & Holden in GM!! They are just competiting against them self.

Might be more a Toyota/Lexus type arrangement. I can see it working if they targeted different markets.

[vztrt]

Holden eyes Opel

http://www.goauto.com.au/mellor/mell...25779E0015B3D5

Volkswagen the target as GM Holden studies Opel brand launch in Australia

14 September 2010

By MARTON PETTENDY

GM HOLDEN is investigating the feasibility of introducing Opel as a stand-alone brand in Australia for the first time.

General Motors’ continental European brand could become a direct rival for Volkswagen as early as next year.

Australia and China were named “priority markets” for exports of Opel models last month by Nick Reilly, who became chairman of Adam Opel GmbH in January, as part of the German-based car-maker’s drive to return to profitability.

Now Holden chairman and managing director Mike Devereux has confirmed Opel is under study for release in Australia and GoAuto sources say highly regarded models like the Corsa, Astra and Insignia could be released here within just 12 months.

“There’s obvious synergy between Opel and Holden,” Mr Devereux told GoAuto in Adelaide on Friday. “There could be a niche for that kind of brand here in Australia. I don’t know how we would position it, but we’re looking at it.

“Opel has made some statements recently about getting healthy and getting profitable in Europe, which I think they’re doing. They’ve also made some statements lately about export ambitions and obviously we’re talking with them about the potential (for Opel) here in Australia.

“So we’re talking to them, we’ll do something that makes sense if it makes sense and we’ll talk to you guys about it when we’re ready to do that.”

News of Opel’s potential introduction in Australia comes 20 months after the reversal of GM Holden’s decision to relaunch GM’s luxury brand, Cadillac, here just two weeks before the new mid-size CTS sedan was due for release, in January 2009.

Holden blamed the global financial crisis for its 11th hour rethink on Cadillac, but insiders now say the improved economic climate and stronger Australian currency could give Opel a better chance of success here than Cadillac.

“Opel is a little different to Cadillac, which is a very high-end product, so the two things aren’t all that similar,” said Mr Devereux. “Opels are not Cadillacs in terms of price points or customers expectations. We have no plans to introduce Cadillac.”

The plan to launch Opel here is made more logical by the disappearance of Saab from the GM stable. Now in the hands of Spyker, the Swedish brand was one of Holden’s now-defunct GM Premium Brands group, which also comprised Cadillac and Hummer.

While Opel’s British sister brand Vauxhall had an Australian presence in the 1950s, Opel’s introduction here would represent an about-face on Holden’s decision to discontinue models such as the Corsa-based Barina, the Vectra and, most recently, the Astra, in favour of Korean-built models from GM Daewoo.

Holden replaced the Opel-built Barina with a version of the Daewoo Kalos in 2005, while the Vectra made way for the Epica in 2007 and the arrival of the Viva signalled the end of the Astra in Australia last year. Although Holden attempted to localise each model to differing degrees, all models represented a significant shift downmarket from the German models they replaced.

The AH-series Astra coupe, hatchback and convertible range was axed, leaving the small Combo delivery van as the only remaining Opel-sourced model on sale in Australia.

GM Europe has since released an all-new Astra small hatch, joining the Vectra-replacing Insignia sedan, hatch and wagon, the latest Corsa light-car and the GT roadster. Opel also sells the Meriva and Zafira people-movers in Europe, along with the Combo, Vivaro and Movano vans.

Facelifted versions of those models could make Opel a direct rival for Volkswagen here, as it is in Europe.

The Corsa would compete with the new Polo (priced from $16,690), the Astra would rival the latest Golf (from $24,990) and the Insignia would take aim at the Passat (from $38,990).

Holden’s Korean-built models would remain cheaper, with a revised Epica mid-size sedan to continue to represent Holden at less than $29,000.

The all-new ‘Barina Spark’, to be launched at next month’s Sydney motor show, would open the Holden range with a sub-$15,000 pricetag and will be joined within 12 months by the Australian-designed, Korean-built Aveo light hatch. The Aveo will be sold elsewhere as a Chevrolet but will arrive here later next year to replace the current Barina, which should also remain cheaper than Corsa and Polo.

In between the Spark/Barina and Epica will sit Holden’s Cruze, which is currently priced from $22,990 drive-away with alloy wheels and enters production in Adelaide as a sedan in February, then in the third quarter of next year in hatch form, and both should undercut both the Astra and Golf.

Opel last week revealed a show version of its next three-door Astra coupe, dubbed the GTC Paris Concept, and next year will also introduce the Ampera plug-in hybrid, which is based on the Chevrolet Volt. That should go on sale in Australia in 2012.

The move could also facilitate the release of flagship performance versions of the Corsa, Astra and Insignia from Holden Special Vehicles (HSV), which could share federal certification, spare parts and other logistical costs with Holden.

Mr Devereux made it clear that GM’s European models – unlike its Korean vehicles – would not be sold here as rebadged Holdens, but as Opels.

“What Nick Reilly was specifically talking about was Opel-branded cars being sold in the international markets,” he said.

“Opel is looking not to supply cars for people to rebrand, which they do – we sell a Combo – but to actually to have Opel-branded vehicles in export markets.

“There are a number of countries around the world that are looking at the potential of Opel. They’re obviously talking about some other markets as well.”

One Holden source told GoAuto the Astra would be a core model within the Opel line-up, which could be launched here before the end of 2011 if all goes to plan.

GM reversed its decision to sell the Opel business last year, before its application for government loan guarantees were rejected in June. Instead, GM Europe said it would work with state governments in Germany to return its Opel and Vauxhall brands to profitability by 2012.

Germany is both Opel’s and Europe’s largest single vehicle market, but GM hopes markets such as China and Australia – followed by South America and other south-east Asian markets – can improve its financial fortunes.

Opel has a long history with Holden. Both the 1978 VB and 1997 VT Commodore models were based on Opel Omega designs, while the sleek Calibra coupe was perhaps the most memorable Holden-badged Opel.

“Opel was the source of product for quite some time from an engineering standpoint beyond Commodore,” acknowledged Mr Devereux.

“And if you look at the Commodore, it also has some German engineering roots from the 1990s Omega platform.”

Mr Reilly, who ironically once oversaw GM Daewoo’s Korean operations, told Germany’s Stern magazine in late July that “Opel is an icon of German engineering”.

“For markets such as China, Australia and South Africa, Opel can be a premium brand,” he said.

“We’ve got great, award-winning cars. The strategy is to rather focus on China, Australia and South Africa.

“We have to be able to compete with Volkswagen. If possible, we should have an even stronger brand. And in Germany we should be able to charge higher prices than the French or Koreans, but we will not attempt to copy BMW, Mercedes or Audi.”

[dannyhilton]

Very interesting. Not sure it'll work though, no one knows Opel, and we all know the thing that sold the Astra were the Holden badges on it, despite being a good car too.

[vztrt]

http://theage.drive.com.au/motor-new...001-15zp0.html

Opel shock: Astra back to Oz Bruce Newton
October 1, 2010 - 11:36AM

GM's German brand plans an Aussie invasion - including a return of the Astra small car. Bruce Newton reports.

Holden is set to face an enemy within after General Motors' European arm, Opel, said it was planning to bring a full range of its models to the Australian market.

The production version of Opel's stunning GTC Paris concept car is expected to be one of the vehicles that forms part of an Australian Opel line-up if the German auto giant successfully completes plans to enter the local market.

The GTC previews the Astra coupe, which will go on-sale in Europe late 2011, and could be in a showroom near you in 2012.

Opel chairman Nick Reilly said the plan was for a full line-up of Opel models from the mini-Meriva people-mover to the Ampera plug-in hybrid to be offered to the Australian public.

There has been speculation Opel would enter the Australian market since GM decided to hold on to the brand rather than sell it off as part of its bankruptcy plans. Reilly said he hoped to have a deal finalised and announced this year with sales commencing toward the end of 2011.

"I am optimistic we will re-enter the Australian market," Reilly told Drive. "We are putting some fine details to it, we want to do it right because we want to be there for the long term.

"We have to finalise distribution and the model range, but the intention is the complete product portfolio."

Various Opel models have been previously sold as Holdens in Australia, but they have been gradually replaced by GM-Daewoo product from Korea. While cheaper to source, the Korean cars also brought with them a significant technical and quality drop.

Reilly, however, denied that coming to Australia would tempt away disillusioned Holden small car buyers. He nominated Volkswagen as Opel's logical, key rival, in terms of premium image and pricing.

He said the Astra - once a big seller for Holden - would be Opel's most popular model here.

"Opel is well known in Australia, it's a German brand, it's got German heritage with German engineering, people value that and we have got some great looking cars. We are not there to compete with Holden, we are there to compete with other imports."

Reilly would not be drawn on the details of Opel's Australian distribution plan and how closely it would be related to Holden.

"It is a completely different brand and it would be a separate business," is all he would say.

Reilly is driving Opel's international expansion as it strives to regain profitability in the post-bankruptcy GM world. It has also recently announced export deals to Israel and Chile.

The GTC is a very accurate depiction of the Astra coupe (actually a three-door hatch), with only a few motor show flourishes such as 21-inch wheels.

The show car was powered by a 2.0-litre turbocharged, direct injection four-cylinder engine producing 213kW and driving the front wheels via a six-speed manual transmission.

The chassis has also come in for treatment with wider tracks, an updated version of Opel's mechatronic FlexRide suspension and a limited slip diff.

Opel chief designer Mark Adams said the GTC was "the most sporty and dynamic interpretation of Opel's design language yet".

"With this car we wanted to create the most emotional Opel."

The other reveal on the Opel stand was an Astra Sports Tourer station wagon, boasting up to 1550 litres of carrying space.