The Opel Sale

If anyone ever asked me what my favorite General Motors car brand was, I'd never hesitate in saying, "Opel." 

This is the current Opel Corsa hatchback.  Can you think of any car as cool as this at your Chevrolet dealership?

But Opel, and its British cousin, Vauxhall (the Vauxhall brand, a separate entity within GM until the mid-1970s, is now basically Opel with a different name and with right-hand drive cars),  will be a part of the GM family no longer.  GM is selling its European operations to Peugeot for $1.4 billion.  The reason is simple - Opel isn't making any money for General Motors and hasn't been doing so for a long time.  Opel/Vauxhall sales for 2016 accounted for 5.7 percent of all new-car sales in the European market, and its biggest income came from Great Britain, which is leaving the European Union and has seen the pound sinking as a result.  Bearing all that in mind, GM CEO Mary Barra felt it was time to give up the ghost of Adam Opel himself (the company's founder began the business in 1862 making sewing machines, and later, bicycles before the car end of the business came along in 1899, after Adam Opel's death) and sell GM's European assets to Peugeot, a company that was at death's door after the 2008 financial crisis but has since bounced back handsomely.

This is ironic, because back in 2009, when GM was at that same mortal door, its then-CEO, Fritz Henderson, gave GM brass plans to sell Opel to a Russo-Canadian consortium in order to raise some badly needed cash.  The board of directors responded by giving Henderson the boot; surrendering its European operations was a bridge too far for them.  I could sympathize with that feeling.  After all, Opel has made some incredible cars in the 88 years that GM has owned it.  But it's made many lackluster cars as well, as any American who bought a Cadillac Catera (a rebadged Opel Omega) or a Saturn L-Series (a watered-down, American-made Opel Vectra) in the nineties would attest.  I, of course, still liked them, at least in comparison to other GM cars of the time.  But European consumers have found too many Opels of this century devoid of any meaningful pizzazz, and that lack of magic caught up with the brand. 

Will GM stop being a player in Europe completely?  Barra said that the company will still sell Chevrolets and Cadillacs in the Old Country. So, in other words, the answer is, yes, it will.  Chevrolets and Cadillacs have never been popular over there, and GM's sale of Opel and Vauxhall will diminish the already paltry presence of its American brands in Europe.

Call it "GMExit."  Anyway, GM will be concentrating on the Americas and China from here on, deciding that it doesn't need to keep a presence in Europe just for the prestige.

And what of Opel buyer Peugeot - whose volume car, the 308 (below) will likely be the basis for Opels to come?  What does Peugeot chairman Carlos Tavares get out of this?

Plenty.  He gets more capacity, a brand with a distinct identity thanks to its German heritage and its engineering history, a new crossover model, the Opel Crossland X, below (ironically, Opel's latest attempt to drum up sales in what is becoming Europe's most popular market segment) and the infrastructure that would be necessary for Peugeot to re-enter the United States, if it so chose.

Tavares does not so choose yet, but if he can get Opel and Vauxhall (assuming he even keeps the Vauxhall brand) to make a profit without closing any factories or laying off workers, as he says he can do - who knows?

It's going to be an exciting time for the global auto market coming up, and if Peugeot can pull this off,  it's going to be one of the most monumental feats in automotive history.

And Opel is still my favorite GM brand. :-)

Have a look back at nearly nine decades of GM's ownership of Opel here.

Saab Story

General Motors just announced it is discontinuing the Saab brand. And by that, I mean GM is shutting down the Swedish carmaker that it bought out a decade ago. There will be no more Saabs in any way, shape, or form (ironic, given Saab's history of unorthodox shapes in forms in its styling).

GM had hoped to find a buyer for the brand, turning first to consortium led by the Swedish sports car maker Koenigsegg Group AB. When those talks broke down last month, GM tried its luck with Spyker Cars, a firm from the Netherlands. When those talks broke down, it became obvious that two strikes were out in this case and GM decided that Saab need "a quick resolution." And so Saab will join other European niche carmakers such as NSU and Simca atop the dustbin of history.

Saab, originally an automotive division of an airplane company (Svenska Aeroplan AB, from which the name was derived), was ripe for a takeover when GM purchased half of its stock in 1989. Its sales were weak, and GM saw opportunities for expansion. The Detroit automaker modernized the brand's lineup and acquired the whole company by the year 2000, but its sales have suffered again of late and GM could not afford to keep it going. In the end, GM's European operations - at one point almost reduced to minority stockholder status in its other brands, Opel and Vauxhall - had no choice.

This is a sorry chapter in automotive history. GM learned the hard way that expansion isn't always good. Also at fault is the Swedish government, which could have bailed out Saab and saved people's jobs in Sweden but chose not to. Also, as smaller firms get bought out and liquidated by the giant car companies of the world, automotive innovation - historically spurred by smaller companies - will be less evident. As for Saab, it - and its Swedish rival Volvo, now owned by Ford - have long been celebrated for their safety innovations. Saab, in particular, made seat belts standard on its GT 750 model in 1958, and they developed the first headlight wipers, the first passenger compartment air filter, and cholro-fluorocarbon-free air conditioning. These are the kind of innovations that bureaucracy at large companies doesn't allow. Indeed, bureaucratic gigantism almost destroyed GM. Now GM is retiring Saab. What a sad irony.