GM Subsidiary Becomes Profitable… After Divorcing GM

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Divorce usually makes you poorer – but not in the case of Opel, formerly the estranged partner of General Motors.

After separating from GM a year ago – and shacking up with Peugot, the French car combine – Opel began making money again.

After 20 years of losing it.

Opel reported a profit of  $979 million in 2018 – compared with a $204 million loss for the last five months of 2017, when it was still ball-and-chained to GM.

Hilariously, GM practically gave away Opel to Peugot, insisting that investors accept a loss to seal the deal. And now Opel is no longer giving away cars – “discounting” them, in car industry jargon – as it did when GM owned it.

What’s interesting about all this is Opel made all that money in 2018 selling the same cars it wasn’t selling in 2017. The only major change was the leadership (and ownership) not the lineup.

This says something about GM’s leadership that ought to be of interest to anyone who owns GM stock.

Something not good.

It’s not just this Opel business, either.

GM is in the process of destroying Cadillac; instead of “zigging,” GM’s luxury division is flat-lining. This coincided with GM’s decision to move Cadillac’s PR and marketing headquarters to New York City – a place that is to cars what Vegas is to peace and quiet. That decision has been rescinded, but the flailing continues. GM doesn’t seem to know what to do with Cadillac – because it doesn’t seem to know what Cadillac should be.

A luxury brand? A luxury-sport brand? An electric luxury-sport brand?

Buick is gasping on the floor like a just-landed flounder.

GMC takes sales away from Chevy – and Cadillac – by reselling the same vehicles, slightly disguised. GM spend lots of money marketing three badge-engineered brands.

Make that four – since everything Buick sells is also sold by Chevy and GMC, too.

Well, they try to sell them.

GM probably could, too – if GM management could figure out how.

Maybe Opel will tell them.

. . .

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8 COMMENTS

  1. Really a sad story. Opel was back on the right track under CEO Neumann who asked for & got closer cooperation with GM for latest & greatest tech & powertrains, platform sharing with Chevrolet & Buick in USA. Neumann also convinced GM to pull Chevrolet out of Europe to focus on Opel. GM was “committed to Opel as part of the GM family”, per Mary Barra in the January 2014 conference call. PSA cooperation for certain models (SAVs & small utilitiy vehicle) was already in the pipeline. Opel was just about profitable for GM end of 2016 but GM wrote down charges to close Bochum Werk in Germany. Then Mary Barra & Dan Ammann decide to GIVE Opel to PSA when VW or Daimler would have PAID for this GERMAN BRAND. PSA’s “profits” with Opel are thanks to groundwork done before the sale & because GM no longer used Opel as a writeoff.

  2. Add in a few Bob Lutzes and Harley Earls.

    Re The Last Buick…In my search for a car to replace my ’01 Pontiac GP GT coupe (at 160K miles at the crossroads of how far it will last and how much money I have to throw into it to solve some developing problems even though maintained well), I looked at the Regal Sportback and it hits all the marks I want in comfort, performance, cargo capacity, the right price, and being, well, a little different…except try to find a Buick dealer who will actually want to sell one to you!

    Meanwhile the buzz around the new Mazda 3 hatch is astounding, it looks smashing, and if it’s a little bigger than the current 3, it’s right in the consideration set which I never thought I would say. Then again, I know long time Caddy collectors who are buying Lincolns.

  3. Probably GM would do fine if it just had more “diversity”. Look how hiring incompetent people because of skin color, ethnicity, sexual perversions and such has worked for other companies. Maybe they should save big bucks and hire one of those guys named Randy who speaks with an Indian accent and works for Verizon or People PC for shits and giggles.

    Instead of moving the company to New York, they could pull up stakes and take the whole shebang to Pakistan….or Afghanistan, any one of those “stans” would work. You could order your vehicle with those rows of hangy balls at the top of the windows.

    Personalized cars and trucks. Don’t worry about reliability or styling. If you have a problem you can always call the help center and speak to one of the Randy’s. In stilted Pakistan English “Sir, have you tried a restart? Ok then, go to start and click on it. Then click on control panel. Do you see “internet options? Ok, then click on that and tell me what you see”. This stuff seems to work for all the other big corporations. You say you hate the big corporations? Take a number and stand in line. The next available technician will be available in………2 years and 20 minutes…..thank you for holding.

  4. I haven’t driven one yet but the Opel based Buick Regal to me looks beautiful. I have always had a soft spot for Opels going back to my ’71 GT, funky little car but loads of fun.

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