GM’s board has decided that a great, global auto maker really ought to be, er, global. It will keep its Opel and Vauxhall auto-making businesses in Europe. The board switcheroo is a poke in the eye to Germany’s political and labor leaders, who advocated selling Opel to a consortium led by auto supplier Magna International; jobs were the issue, and the German establishment believed Magna would save more of them. And of course it’s a blow to Magna’s ambitions to become an auto manufacturer (not to mention the murky aspirations of its Russian partners.) GM’s board was always conflicted about its original decision to sell 55% of Opel to Magna; directors knew that exiting Europe would effectively narrow GM’s opportunities for many years to come. Yet in the first go-round, the board couldn’t unite around the concept of spending billions of dollars fixing an enfeebled Opel. GM had only recently emerged from bankruptcy protection and was still part-owned by the U.S. government. What changed? Well, Germany’s problematic subsidy pledges to the Magna group spurred the European Union’s antitrust regulator, Neelie Kroes, to take a hard look at the deal – and it ultimately landed back with GM for reconsideration. The passage of time allowed GM board members to take stock – they saw a gradually strengthening auto maker, they regained some confidence in GM’s prospects – and – voila! – Opel (and U.K.’s Vauxhall) will remain in the GM family. Inside GM, the dynamic is quite interesting – CEO Frederick “Fritz” Henderson had originally recommended selling Opel to Magna, according to my WSJ colleagues. His board seems to have nudged him in their direction. These events underscore Henderson’s relatively tenuous position as a holdover from the “old” GM contending with a feisty new board of directors determined to remake the company into something vital and long-lasting – and, yes, global.
Bill
Daniel Mullen
David Graves
Joseph P. Hillenburg
Danny K.
Consigliere hon. Ledwinka
November 3, 2009
Its the right thing to do. Opel provides small cars, engineering services, a european foot, export prowess, etc. It was unbelievable that GM would sell it. It also real stupid to sell Saturn. And Pontiac has the Vibe, which is a Toyota Matrix knock off,
but, get great fuel economy, and is a great car to drive. Raise the price of gas and small cars will sell like hot cakes. But, that would be too logical, and neither Democrats nor Republicans have the kahones to do it. Anyway, I’m glad GM is keeping Opel.