Opel execs wonder how recent GM moves will alter their business

Thu, 26 Dec 2013

The ship called Opel has been heaving through a storm, non-stop, for more than a decade. The aborted sale in 2009 when General Motors decided it could do better than potential buyers only led to estimates of up to $20 billion in costs to GM, more years of turnaround plans, retreat from global markets and churn at the CEO position. It was thought that this year, with Karl-Thoman Neumann at the helm, the promise of a $5.2 billion investment, the withdrawal of the Chevrolet brand from Europe and a bit of breathing room, it could finally settle into a calmer rhythm. According to a report in Reuters, recent moves at GM have Opel execs worried that that might not be the case.

Opel has been asking to make more Euro-centric offerings in order to compete with rivals. But the appointment of Mary Barra to the top slot at GM and her past experience at harmonizing product development, as well as former boss Stephen Girksy's departure as GM vice chairman, has insiders worried that they'll be pushed even more to make do with global product. On top of that, their best chance of getting specialized goods took a hit when GM began to untie its bond with PSA/Peugeot-Citroën that had promised a new compact-car platform. The Corsa, a model that Opel needs to do well but can't because it's seven years old, was hit hardest by that news.

These facts mean that the multibillion-dollar investment won this year to develop 23 models and 13 engines over the next two years will need to go further. GM told Reuters "there [is] no change in its stance on Opel," but, as an analyst said, "Rebuilding a weak brand takes years of delivering outstanding product." The question is whether GM's stance - and its commitment to Euro-focused product - will stay consistent long enough to give Neumann and Opel a real shot.

By Jonathon Ramsey