General Motors has enrolled in one hell of a “bootcamp.” Flat on it’s corporate back after going bankrupt in 2008, it was unrealistic to think the former automotive Goliath would spring back into marathon shape in just a few years, but check out what’s up with GM’s latest health regiment.
GM is now ditching mere “physical therapy” and has now moved on to serious marathon training to regain it’s title of the mightiest car company on the planet. GM will never be the far-flung behemoth that once held almost 50% of the US market. Those days are over, never to return, but The General has a different plan these days and the sale of it’s European subsidiary Opel/Vauxhall a key part of the strategy.
According to the Associate Press, “By shedding the bulk of its European operations, General Motors is getting rid of a perennial money drain and gaining essential cash that it can use to reward shareholders and invest in future technology such as electric cars and ride-sharing.
The Detroit automaker also indicated that it may pull out of more unprofitable markets in the future.
GM on Monday sold its European Opel and Vauxhall brands to French carmaker PSA Group for roughly $2.33 billion, retreating from the world’s third-largest auto market after almost two decades of futile efforts to make money. The brands have lost $20 billion in the fiercely competitive region since last making a full-year profit in 1999.
“I think they’re ready to cut their losses and move on,” said Morningstar analyst David Whiston. “They’d rather take their time and money and spend it elsewhere on something that has a better return.”
Along with $2 billion cash, GM sheds almost 40,000 employees, 17 factories and half their European finance arm. Combined with shuttering it’s Australia operations, GM also loses serious technological and engineering resources as well.
While publicly citing electric cars and ride sharing, Corvette, Camaro and GM performance fans are keen to know what these developments will mean for enthusiast cars, how engineering resources will be re-arranged and where else big-buck cash injections might show up.
GM has relied heavily on Opel for small car engineering while essentially making Buick a rebadged version of the German brand over here. Australia provided much performance car know-how and supplied the foundation of the Fifth Gen Camaro, Pontiac GTO/G8 and the Chevy SS as well.
Here’s the good news, a good chunk of that engineering development work should be heading home back to North America, where it probably should’ve never left.
With the advent of the C7 Corvette and Sixth Gen Camaro, the epicenter of GM performance is clearly here in North America and hopefully, that operation will get a cash injection as well.
Small car engineering will continue at GM Korea and GM China but that was in full swing already.
There will still be some corporate “relations” between the former kin, and there are some patent issues to deal with, but the divorce is on track. Sadly, the recently introduced Opel Insignia would have made a nice Buick but as we all know, breaking up is hard to do.
We’d like to see the RWD Aussie cars resuscitated here in North America as we think Chevy and Buick both need proper RWD flagship models. With fuel economy standards screwing things up this is a long shot, but maybe a clever model mix could hit the sweet spot.
Offering milder versions and a station wagon model of a new-age Chevy SS and Buick Roadmaster would be critical.
GM has a electric hybrid transmission laying around so adding that to a mix of V6 and V8 powered models could garner “green” cred and like it or not, could grease the approval process. Hell, a full-size Buick “Electra” leveraging all of GM’s EV tech would be a no brainer as well. Offering a four-wheel-drive equipped station wagon models would widen the appeal of the range as well. GM is already on to this…
GM would never approve a slow selling, gas powered V8 powered sedan–not these days–so adding models that could be construed as green, crossovers or SUV alternatives, could hit a broader swath of the market and be an easier sell.
Last but not least, some folks think GM has a bigger goal up it’s sleeve. According to CBS Philly, the sale of Opel primes GM to take over Chrysler. They speculate “The potential final act of this continental drama is even more significant. The sale eliminates a product overlap in moderately priced passenger cars, that opens the door to the merger of GM and Fiat Chrysler Automotive.”
Sergio Marchionne has been seeking suitors for the Pentastar operation almost as soon as the Obama administration damn near gifted it to Fiat in the throws of the Great Recession.
Maybe there’s something to this corporate musical chairs after all or maybe GM wants to rule the world again.
They would certainly become the 800 pound gorilla of the auto industry if such an event occured.
What would you like to see from GM regarding Corvette/Camaro? How would GM integrate Chrysler into it’s roster? Ditch Chrysler and Dodge and keep Jeep and Ram? Let us know below.