Selling of Opel a bad Idea?

One of the reasons Chrysler is in a hole is because it sold of it's Euopean operations during it's first bail out. So when the North American market takes a down turn, Chrysler has nothing to even it out in terms of overseas sales. Now..I know Opel is not huge on GM's bottom line..but considering everything GM engineers is supposed to be sold worldwide..and much of it can cross over with GM's Asia operations (Daewoo, China Buick), why sell it off? The short term cash eliminates a long term buffer.

It's the worst idea GM has come up with. But GM needs to find a minority share holder in Europe or Germany will let Opel fall off and die to be liquidated.

opel's determined to break away from GM anyway. GM doesn't really have a say in what happens.

It seems to me that there is alot of nationalistic fervor for Opel to break free of GM and become "German" again.

If Fiat gets Opel, I could see a scenario where the German government finances the deal, Fiat plunders anything of worth from Opel, chops any products with any Fiat overlap, and in afew years walks away, leaving the raped, decapitated corpse of what was once Opel for the German government to deal with.

If I were Opel, I wouldn't be so quick to completely break the ties with the GM mother ship.

GM needs Opel, and Opel needs GM.
GM should just accept Magna's 20% offer and hope that the German goverment lends a hand.
Without Opel, GM has no future.

GM needs Opel, and Opel needs GM.
GM should just accept Magna's 20% offer and hope that the German goverment lends a hand.
Without Opel, GM has no future.

I'm in two minds on this one. But let's think it through...

GM has failed Opel, badly, in the recent past. Opel was once a gold mine for GM when it produced superb products that didn't even make it to the USA. When GM bought SAAB, it robbed Peter (Opel) to pay Paul (SAAB) and stifled Opel from seriously good product. Opel now wants out of the GM empire. Do you blame them?

GM has a presence in Europe already with low cost products from the Chevrolet brand. Chevrolet is flourishing in Europe as a result of its new offerings and could only increase market share when the newer GM-DAT products are released. The Chevrolet brand also opens the door to competitive product from the USA to find its way to Europe. That's if GM can get their act together!

Another point: GM should have enough design centers in North America, Asia and Oceania to develop world class products that is the equal of anything coming out of Europe/Japan. A leaner GM might be better positioned to meet the challenges it faces particularly from a product and cost perspective.

It's all relative IMO...

If we're talking about a sale of the Opel brand, then sure... Go for it. But if we're talking about a sale of GM's European operations, then I think it's a horrible idea.

Then again, it seems that GM is trying to acquire a 30-50% stake in Fiat in exchange for it's european operations, so I guess that might be okay (technology and profit sharing)

I think GM intended to sell the Opel brand and then use the company's European operations to fuel Chevrolet, Cadillac and possibly Vauxhall, essentially making Opel irrelevant. But who knows...

I want to trust GM management on this, but MAN have we been burned in every way before...

One of the reasons Chrysler is in a hole is because it sold of it's Euopean operations during it's first bail out. So when the North American market takes a down turn, Chrysler has nothing to even it out in terms of overseas sales. Now..I know Opel is not huge on GM's bottom line..but considering everything GM engineers is supposed to be sold worldwide..and much of it can cross over with GM's Asia operations (Daewoo, China Buick), why sell it off? The short term cash eliminates a long term buffer.

Are you kidding, such short-sightedness is a core value at GM. I've complained about this before, but GM has a rich history of selling off profitable units just to gain some short-term cash: Hughes, EDS, DirecTV, GM Defense, Allison Transmission ... all "non core" but generally profitable, and often providing a good balance to the cycles of the auto industry. Throwing out the wheat and keeping the chaff is what GM does best.

GM isn't selling Opel for cash, they are giving some or all of it away to anyone who can afford the red ink. I don't really see what choice they have in the matter.

Isn't GM's plan still to sell Opel, then take the proceeds from the sale and reinvest them in the new company? In that way they'll own a smaller part of Opel.

Again...though..GM's problem right now is it is to exposed to the North American Auto market..which has major ups and downs, is highly based one what is "in style" at the moment, and simply never gonna be something you can build dependable business on. GMAC for instance made money for years...and a lot of times balanced out losses from GM NA. It was not untill it got into issuing bad mortgages did GMAC start loosing money. GM sold it off for cash...and now once this rough patch is over will be missing that dependable income.

Isn't GM's plan still to sell Opel, then take the proceeds from the sale and reinvest them in the new company? In that way they'll own a smaller part of Opel.

See the other thread. GM is looking for equity from Fiat, not cash.

Edit - Looks like I'm wrong, there might be some cash on the table too.

I've change my mind on Opel (again!).

I think GM should keep it providing the new GM does 'the right thing' by Opel and export or at least build cars in the USA.

GM probably shouldn't sell all its valuable assets, just most!