GM prepared to ‘give away’ Opel/Vauxhall

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By David Twomey | April 20th, 2009

General Motors Corporation is prepared to part with a controlling stake in Opel/Vauxhall for nothing but a pledge to invest directly in a new company formed from its European operations, the Financial Times said on Sunday, citing two people familiar with its plans.

Reuters newsagency quotes the respected British business newspaper as saying an investor will be asked to pay at least 500 million euro, or US$652 million in equity, but GM will realise no financial gain as the money will be injected directly into Opel.

GM is also prepared to unload Saab, its Swedish premium brand that filed for creditor protection in February, for as little as nothing in order to divest the brand, the Financial Times report said.

GM, which has lost more than US$82 billion since 2005, has received $13.4 billion in US federal loans and is seeking more than US$16 billion in additional government aid.

The White-House appointed task force has given GM 60 days to come up with a restructuring plan that cuts costs and debt levels more deeply than the carmaker had planned.

By that point, officials have promised a decision on whether to support GM’s turnaround as a much smaller auto company or whether to put it through a bankruptcy process intended to shed debt and laggard assets.

GM Chief Executive Fritz Henderson has already said the carmaker was in talks with more than six financial and industrial groups about acquiring a stake in its European arm.

The Financial Times said Commerzbank, GM’s advisers on Opel, last week sent out an offer document for the German brand.

Italy’s Fiat and SAIC, GM’s main joint venture partner in China, have both denied interest in buying Opel/Vauxhall.

The Financial Times also said GM’s European unit is engaged in “aggressive” contingency planning to protect itself in case the company files for bankruptcy in the United States, citing a person familiar with GM’s plans.

Options under consideration at GM are said to include putting financing in place for its international holdings ahead of a bankruptcy filing, and seeking debtor in possession financing from the US government for the international operations after a Chapter 11 filing, the report said.

Audi02

So what does this mean for Holden??? Anyone care to guess?
Phill

I’ll have it.
Lukaas

Tata will buy it… or Chinese company…
Dlr1

Drive reports that Holden has cancelled 2 months worth of orders for the Astra until they can “review” the business case for importing it and renegotiate a suitable price. Clearly there is a message from GM HQ that its brands need to be profitable, and even its individual product lines need to be profitable. No point in selling the Astra here at a loss if they are about to sell off the GM unit that manufactures it.
Brett

Sounds rather like desperation.
http://integra holstein hore ).( ).(

Yes when your in deep financial trouble you always hive of the best bits ,so you can keep the junk side .

Opel and holden are the cream of GM ,with all the small car expertise and rwd experience , so sad , this is an indication of how bad it is .
Limited Slip

I dont think we have seen the worst of it yet, it goes deeper than anyone could imagine……GM has lost over 80 billion recently and when massive losses such as this occur more things are revealed as time goes by……….so Holden should be very very very nervous. GM will re-emerge as an American company only or will just disappear altogether.
Alex

Well it’s not looking like you guys are gonna get the Insignia or the next Astra then does it?
Duck

That does not make any sense GM! None at all! Opel, makes the bloody Astra GM!!!!!! As you should know! I don’t think you know because you would rather keep your sh*thy Pontiac and GMC american brands instead! Opel, build quality cars like the Astra, Isignia, Corsa, Zafira, Agila, Meriva, Tigra and the Antara (Captiva Maxx). But you want to get rid of them, instead of Pontiac or GMC!?!?!?!?!!!

The Tigra and the Astra are one of the main cars you sell across the world! Specially the Astra! So what the hell are you thinking!? It sickens ME!

Can someone explain!?
Duck

“The Tigra and the Astra are one of the main cars you sell across the world! Specially the Astra!”………………..that are built by Opel!
Neil

Just because GM no longer holds a controling stake in the company, does not mean that it is completely letting go of the firm – could this be a similar situation to Ford in its “sell-off” of Mazda, minus GM making any such profit from the sale?
Captain Mainwaring

An unholy mess, it would seem. Holden’s only chance would seem to be if it emerges as part of the ‘good’ GM. But with Commodore sales running at half the original plan just as the VE was supposed to enter the payback phase, that seems unlikely. US taxpayers are not going to prop up offshore lame ducks.
Duck

Well, you watch GM will get rid of Opel, probably.
AAA

It means Holden is more valuable than Opel
davie

Stranger and strangerer…

My perception is that Opel builds high quality euro focused small (world) cars. Precisely the same sort of thing that is making VW so much money at the moment.

I understand however that Opel makes a loss.

There’s probably more than meets the eye here but it does seem odd that GM are getting rid of something that with a bit of love, would give them a good return.

GM is to be staggering around like a punch drunk fighter just waiting to fall. I’m sure it will make a big thud when it happens which no one wants, however it has to fall eventually
Bret

I think it is quite obvious why Opel is on the chopping block instead of some of the US brands: US jobs and the US economy are the only things that will attract Govt bailouts.
Overseas jobs mean nothing in the scheme of things.

AAA Says:
April 20th, 2009 at 6:51 pm
It means Holden is more valuable than Opel

No, it just means that Opel is probably a saleable asset, because of the market it competes in. I don’t know if Holden would attract a buyer.
Shak

why would GM want to sell the company that makes its best world seller. The astra has sold 10 million units since 1995. These figures compared to someting like 15 million combined from Cadillac and Chevrolet in the same time period. GM should keep Chevvy, Caddy, Opel and Holden. Holden could make the platforms for both Caddy and Chevvy and Opel could make all the small cars in world plants such as Melbourne or South Africa. Lets hope opel and Holden survive so they can trade with each other and not that rubbish heap we call GM
Limited Slip

GM have to get rid of non profit making arms of their business………..HOLDEN havent made a profit for years and are only still in business because of Australian GOV handouts……so it makes sense to give them the arse.
milobob

bye bye astra.. hello more korean/american crap!
JEKYL & HYDE

if opel,gm and holden can’t readily agree at what price they can make,wholesale,retail some of there best quality and higher selling models,then god help them.toyota is made everywhere,sent everywhere,sold everywhere.don’t see them wingeing.maybe a few of their creditors could help them see sense…
Frenchie

There is some creative “thinking/accounting” going on here.
The article says that they are selling only a stake in Opel and this is purely to protect Opel from going bankrupt.

Maybe the new stake holders will be able to cut costs enabling Opel products to be more cost effective?
gearboxdawg

The only reason Holden is surviving because it is part of a large conglomerate. If Holden was a stand alone company, it doesn’t have the economies of scale in bulk purchasing of materials and auto parts. It would be nice to see Holden be in Australian hands but its unlikely because its the crown of the Australian industry and has significant brand loyalties.
MisterTwo

AAA, how can Holden be more valuable than Opel? Opel develops and manufactures all of the cars it sells (except VXR8), is in multiple world markets with several factories. Agila, Corsa, Astra, Insignia, Tigra, Zafira, Meriva etc. That’s a lot of cars. Up until the VE Holden didn’t develop it’s own cars from the ground up – Aussies seem to conveniently forget that the Commodore was always basically an Opel Rekord/Omega with some detail changes and different engines.
WVB

GM’s probably forgotten they even own holden.

……..oh and sir one more thing today,
what about that little 2 bit company down under? …..err Holden I think it’s called.

Ahhmm, Just give that away aswell. Maybe make it the ‘plastic toy’ to who ever picks up Opel & Vauxhall!!
Frontman

With the plethora of Zeta platform builds being cancelled, maybe it’s simply a case of Holden not being salable at all or that (sic) GM feels a little guilty after Holden being shafted by Messers Lutz and Co in building the Heavy Zeta in the first place.

Quote from GMI
[Since then Cadillac's parent company has faltered financially, CAFE legislation has came down hard and GM's main cash source (U.S. government) wants them to focus on fuel efficient small cars. This is throwing Cadillac off track it appears and the derailment is going to hit hard with the announcement that the Epsilon II DTS replacement has been green-lighted.

Cadillac, like several other GM brands, was to get a sedan off of the Zeta rear-wheel drive platform. In Cadillac's case, such car was going to be the DTS replacement. GMI has been told that GM had several goodies in store for the Zeta Cadillac; including the Ultra V8 (now dead) and a 435 HP turbocharged 3.6L High-Feature V6 (in limbo, possibly dead). Development work on the Zeta-based DTS replacement was halted several months ago by GM brass, but GMI is told that development was not far past the design stage.

Expect the Epsilon II Cadillac DTS replacement to show up in 2013 as a 2014 model-year vehicle. Although we have not heard a specific name]
BK

GM Chief Executive Fritz Henderson looks like that guy Josef Fritzl. No wonder GM are in trouble
Adam

Wouldn’t it be great if both Ford And GM ‘gave’ their Aussie businesses to the Australian government. Then we could combine the expertise of both and create a new Australian owned company to focus on selling quality cars to the middle-east and Asia-pacific region. Sure that would cause job losses, but nowhere near as many as the inevitable total pull-out of manufacturing will. More likely I guess, is that both will be purchased by Chinese companies for their expertise and tradition, but manufacturing will undoubtedly go. Yeah, I know..I’m dreaming..