Final Inspection

Opel Dragging GM Down

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General Motors, even under new management and government ownership, continues to lose billions in Europe.

The movie “Groundhog Day” is about a TV weatherman who gets stuck in time, doomed to repeat the same day over and over.

Those of you who have followed my columns over the years might know I periodically criticize auto makers and executives and the decisions they make.

If my predictions of trends and events have been accurate, it’s not because I am so brilliant, but rather it’s because somebody else was so stupid. Forgive me if I have become addicted to common sense and reality.

We’ve seen a lot of bad news concerning car sales overseas. Yes, we have become a global economy and that genie cannot be stuffed back into the bottle. But it’s a sad thing.

General Motors has lost $12.4 billion in Europe since last realizing a profit there in 1999. Of course, we all know that was the “old GM” that burned through billions of dollars of cash, sold off assets including GMAC and saw market dominance decline at home and abroad.

Everyone knows the “new GM” would never make or perpetuate those same allegedly goofy decisions (use of the word “goofy” here has connection with GM’s goofy commitment to make dealers take Disney training).

But GM, even under new management and government ownership, continues to lose billions in Europe. Opel/Vauxhall is dragging down the value and equity in the entire company.

No comment here on the brewing alliance between GM and Peugeot other than, “What the…?”

Just a thought, but it appears nobody wants to buy Opel. The Jim Ziegler solution is simple: “Cut your losses. You put down Saturn and Oldsmobile and Pontiac. Why not Opel?’

I’ve written about Opel over the years because of my perception of the allegedly spoiled, oppressive German unions and questionable quality of the product. Since the 1990s, GM has tried to introduce Opel to the U.S. market badged as Chevys and Buicks and even Cadillacs.

Remember the Cadillac Catera referred to as “the Caddy that zigs”?  That car was an unmitigated mess, assembled in Germany, with an engine built in England and a transmission built in France (God help us).

Well the only place the Catera zigged was in the red ink column of the ledger.

Now, once again, we see GM’s European operations dragging the company down. And here’s where it gets weird: GM has changed the CEO of Opel three times in three years.

Former Wall Street analyst Steve Girsky, now a GM executive, is in charge of trying to sort out this Opel disarray. He talks about competing with Volkswagen and more integration with the parent company. Does that mean rebadging Opels as Chevys, Buicks and Cadillacs?

If I sound perturbed, it is because I was and remain a huge supporter of the government bailouts of the U.S. auto industry. It was the right thing to do. But I am outraged as we continue to export jobs, technology and resources to faraway places on the taxpayers’ dime.

Buick has been a hit in China, but most recently the Chinese government is slowing sales and restricting production and distribution as their market seems to be cooling. I also dislike some of GM’s one-way technology swaps in China.

To be fair, Ford’s European operations also are taking huge losses right now. But unlike GM, Ford has been profitable until recent events in Europe threatened to crash that economy centered on the euro and anticipated bailouts by the European Union of failing countries. Ford has posted a profit in Europe six of the past eight years.

It’s late. I have been sitting here sipping on my Remy-Martin Louis XIII Cognac and thinking of what is and might be. I might be wrong about GM’s dim prospects in Europe, but I doubt it.

Keep those calls and emails coming.

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com.

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WardsAuto editors share insights and observations on the global auto industry.

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Dave Zoia

As Editorial Director, I oversee much of what goes into WardsAuto.com, enjoying a ringside seat that lets me observe up close just about every facet of the industry worldwide. I have covered the...

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