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GM May Exit Europe, But Road Blocks Remain

GM May Exit Europe, But Road Blocks Remain

By Philly Murtha, February 20, 2017

General Motors (GM) is discussing a possible sale of its Opel/Vauxhall unit in Europe to France’s PSA Group. A deal could be worth $2 billion and could give the PSA Group a 16% share of the European passenger-vehicle market. One stumbling block in the selling process that appeared this week is dealing with Britain’s loss-making Vauxhall sister brand, UK plants, and deficit pension plan.

Last week, GM and Peugeot Citroen (PSA Group) said in a statement that they were exploring ways to improve profitability and operating efficiency that included PSA Group’s acquisition of Opel. Both automakers have shared a working alliance since 2012. GM Europe (Opel/Vauxhall division) with headquarters in Russelsheim, Germany, employs 38,000 workers with over half of the workers in Germany. Vauxhall, with 4,500 employees and two plants in England, may be a more difficult part of the sales equation with a deficit pension plan and England’s withdrawal from the EU.

GM logoGM’s connection with Opel goes back nearly 90 years, with many ups and downs. Opel was a crown jewel in Europe during the 1990s, with a brilliant engineering chief, the new Vectra midsize sedan, Calibra coupe, and Opel Astra, according to Automotive News’ Richard Johnson. Just this week it was reported that Opel could become an all-electric vehicle (EV) brand, as Opel will soon start selling the Ampera-E, a rebranded Chevrolet Bolt built by GM in Orion, MI.

Most recently, GM has relied on rebranded Opels to add spirit to its Buick lineup—the Verano (a rebranded Astra); the new Cascada convertible; and popular Encore small SUV (Opel Mokka). However, only a handful of GM’s models in the U.S. market are built outside the country, The Cascada is built in Poland and a few models are produced in South Korea and Australia, while the 2017 Buick Envision compact crossover SUV is the first to be made in China.