French Leave

I should have known it was too good to be true.

When Fiat Chrysler and Peugeot (also known as PSA) merged earlier this year, forming a new company called Stellantis - sounds like the name of a sunken continent, doesn't it?  - Carlos Tavares, the Peugeot chairman who shepherded the merger and became the head of the new Stellantis company, was planning to bring the Peugeot brand back to the United States.  I was looking forward to this, as Peugeot is the only French car brand I ever liked, and I was especially looking forward to hopefully checking out the new Peugeot 308 hatchback (below), assuming Peugeot would even bother with hatchback here, or at least a sedan based on the 308's platform.  Such a product, I thought, might tempt me away from Volkswagen - which VW has made a lot easier of late with its rotten product choices for the U.S. as it leans more and more toward SUVs.

When Tavares realized that he suddenly had more brands in the company than he knew what to do with, he concluded that offering one more European Stellantis brand in the United States at a time when Fiat is failing and Alfa Romeo is barely hanging on seemed to be a bit too much. So he canceled plans to bring Peugeot back to the States and has decided to concentrate on the future of the new company's four American brands - the amalgam of brands once known as the Chrysler Group.

Are you kidding me?

I mean, consider the four brands in question.  There are Jeep and Ram, the macho light-truck brands that offer pickups and SUVs that I don't want, and Dodge and Chrysler, which offer boring cars I don't want or, in the case of Dodge, muscle cars I wouldn't dare touch.  Jeep and Ram are obviously profitable for Stellantis, but Dodge and Chrysler have been starved for new product of late.  Tavares is particularly interested in rejuvenating Chrysler, which had been the flagship marque of the eponymously named company that created it before devolving into a nameplate mainly for luxury minivans, an oxymoron if there ever was one.    

Needless to say, I am bummed about Peugeot not coming back to the U.S. after all, because Peugeot has some really interesting  product with more to come in the future.  Also, the quality of Peugeot cars has improved dramatically since the brand quit the U.S. market in 1991, and if the quality of its cars is as good as my Peugeot bicycle - I particularly revere my own Peugeot ten-speed road bike, 26 years old and still going strong - I was definitely ready to consider a Peugeot as my next car.  So this news is a disappointment that has curdled into utter disgust.  Once again, I've found myself waiting for a moment that just won't come.

Okay, maybe Tavares can resuscitate Chrysler and give it better and more interesting product (no word on what happens to Dodge, though I assume its current positioning as a performance brand will be strengthened).  With a new administration in the White House focusing on increasing fuel economy, we might get smaller cars similar to the Peugeot 308, and with the growing importance of developing electric cars - the reason Fiat Chrysler and Peugeot merged in the first place, so, as Stellantis, they could afford to develop them efficiently - we could get electric vehicles from Dodge and Chrysler that puts Volkswagen's ID lineup to shame.  And yes, Tavares does plan to build up Alfa Romeo's presence in the U.S. (Fiat, I really don't care about.)  But I am not optimistic about how this is all going to turn out, particularly with Dodge and Chrysler.  Previous efforts at strengthening those brands haven't worked out so well.

I guess we won't get Opel back either.  

This is a shame, because the Corsa (above) is really cool.

But, Mr. Tavares, could you at least please start selling Peugeot bicycles in America again?

Hail Stellantis! 😠

Peugeot was supposed to come back to the U.S. in 2026.  Hopefully by then I'll be Paris checking out Peugeot cars on their home turf.  But I wouldn't bet on that either.

Wouldn't You Really Rather Have an Opel?

In my earlier commentary on GM's sale of Opel and Vauxhall to Peugeot, I noted that many of the rebadged Opels sold in America in the 1990s were seen as lackluster by consumers in the States.

But what of some of the more recent Opel cars rebadged for sale in the U.S.?  Specifically, what of all those interesting cars at your neighborhood Buick dealership?

Buick and Opel have a history dating back to 1958, when the porthole division began selling Opel cars in America as captive imports.  Cars like the Kadett, the Manta and two-seat Opel GT weren't exactly big hits, but they had cult followings in this country - especially the GT, the Corvette-style look of which more than compensated for its Karmann Ghia-like performance.  Indeed, the connection between the two brands is so great that when GM brought  a sedan over to the U.S. from its Japanese subsidiary Isuzu, it sold it as the Buick/Opel, even though it was neither.

Opel, in fact, has been instrumental in giving Buick a sense of credibility it hasn't had since the original Riviera coupe debuted in 1963.  The current Buick Regal, which debuted in 2010 to considerable acclaim, is a Canadian-built version of the Opel Insignia, while the Buick Cascada convertible (below), which has received mixed reviews, is an Opel made in Germany, the real thing.

And watch out for the all-new Regal debuting at the New York Auto Show in April - it will be based on the all-new Opel Insignia (below).  This car may also be built in Germany.

And this time, a version of the Opel Insignia Sports Tourer wagon (below) may also be included in the new Regal's lineup.

And by the way, the compact Buick Encore SUV is based on Opel's Mokka model.  Opel's engineering and technology have also made their way into other Buicks, including the Michigan-built entry-level Verano, now its in last year and based on the same platform used by the Opel Astra and the Chevrolet Cruze. 

How will Opel continue to supply Buick with cars and components when it will be under the ownership of Peugeot, which is still not back in the U.S. market?  That's covered - for now.  The GM/Peugeot deal in the Opel/Vauxhall sale continues existing supply arrangements for Buick, as well as for GM's Holden brand in Australia, at least for the next six years, which is approximately how long the current generations of Opels should be in production.  But as current Opel models are phased out, and as future Opels are developed on Peugeot platforms, the future for Buick looks problematic.  As Kyle Campbell noted in the New York Daily News, sales of Opel-based Buicks accounted for almost two-thirds of the brand's sales in February 2017, and losing the Opel influence in future products once the current generation of cars is gone might be hard for Buick to overcome.  And at least one option being considered - outsourcing engineering from GM affiliates in China -  isn't exactly an idea that will make the American road that belongs to Buick great again. 

These are classy cars, though, and they're responsible for jettisoning Buick's stodgy image while maintaining its reputation for understatement.  And even though Opel is seen as a middlebrow car back in Germany, its higher-end models have been more successful in America than its volume car, the Astra, which was briefly sold as a Saturn in America just before that brand bit the dust.  There was a bitter irony to the Astra's brief availability in America; though GM created Saturn to show that it could build a good small car for the masses in its home market, Saturn's homegrown Ion, a successor to the original Saturn sedan of the early 1990s, was replaced by a Belgian-built Opel that turned out not to have any mass appeal in the States.  The recent collaborations between Buick have borne better fruit of late for GM, giving Buick a good deal of respectability and, more importantly, good sales.  It's also made Opel more important to the American market as a product development partner for Buick than it could ever be as a stand-alone brand here.  But without Opel, how will Buick fare then?

A spokesman for Buick told the press that the division "will continue to deliver our product plans with excellence and precision," and that can mean a lot of things.  But, as Kyle Campbell wrote, it should mean that GM should look at the automotive trends in Europe and learn from them, even if GM itself will largely become absent from the European market, if it wants to continue Buick's  resurgence.  "Though General Motors will no longer have a foothold in Europe," Campbell says, "that doesn’t mean it can simply ignore the continent. Moving forward, it must keep a watchful eye on the trends that arise in Germany, France and the U.K., because, as history shows, it’s only a matter of time before they crop up here as well."

And outsourcing from China simply won't cut it.

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.

The General Is Motorin'

General Motors reached a milestone of sorts today when it paid back all $6.7 billion it borrowed from the United States government - not to mention $1.4 billion owed to the Canadian government - five years ahead of schedule, putting it on a sounder footing for the immediate future. As it struggles to regain a respectable share of the North American auto market, the taxpayers' remaining interest in GM - $45.3 billion in stock -will eventually be offered for sale. If GM's new products are strong sellers in the showrooms, that could be sooner rather than later.

Thanks to CEO Ed Whitacre, the General is a leaner and more efficient car company, having terminated several brands (RIP, Pontiac and Saturn) and sold Saab. Chevrolet remains the entry-level division, Buick is the medium-priced brand, and Cadillac remains the luxury brand, with GMC Truck the choice of people who wouldn't be caught dead in a Chevy SUV. In Europe, GM still has Opel, whose German engineering is already having a positive effect on Buick's products as the technology gets spread around.

I saw several GM cars at the auto show in New York earlier this month, and while I remained a die-hard Volkswagen enthusiast, I left the GM displays rather impressed. (Actually, I left Cadillac disappointed, realizing that the XLR two-seater had been discontinued, but that's another story.) They have some very formidable product, especially with the electrically powered Volt, which is miles ahead of the Toyota Prius, and I hope Buick builds the GS version of its new Regal. These cars are among the most modern and advanced vehicles GM has offered in a long time, and a happy coincidence of events - a new health care law that benefits its workers, debts wiped out in bankruptcy, corporate restructuring - have made the company more competitive.

Never has they saying that what's good for General Motors is good for the country been more true. Although folks like Senator Bob Corker, Republican of foreign-transplant-car-factory-rich Tennessee (VW is building a plant there too: full disclosure!), opposed this bailout, there were 77,000 good reasons to support it. That's the number of jobs saved by the government's action.

Having saved automobile manufacturing in this country, the government now ought to turn to developing more regional public transit.

Transport News

A few big stories in transportation today. . . 

Warren Buffett, the billionaire investor from Omaha, is buying the Burlington Northern Santa Fe railroad for $44 billion. Buffett - who obviously isn't satisfied with just model railroading - wants his Berkshire Hathaway company to invest in a build up freight railroads to provide a sound transportation infrastructure for the U.S. economy. Buffett is bullish on the economy;'s future, and he certainly demonstrated so with this move. A skillful investor by nature, Buffett's purchase of Burlington Northern Santa Fe gives us hope for a strong economic recovery - Buffett only bets on a sure thing. I just hope he gives Amtrak a break on whatever BNSF lines the passenger rail service rents for its routes.

BNSF trains may soon be carrying more cars from the domestic automakers to market. On the heels of Ford's unexpected profits, General Motors announced a 4.1 percent increase in October sales, its first year-over-year gain since January 2008. GM has wiped out its debt in bankruptcy court and now seeks to build on its four remaining brands - Chevrolet, Buick, Cadillac and GMC Truck. Don't count out the General out - the current Chevrolet Malibu is a solid product, and Cadillac's renaissance continues with its excellent updates of cars like the CTS.

GM is doing well enough, it's decided not to sell a majority interest in Opel and Vauxhall in Europe to a Russo-Canadian consortium after all. By getting financial support at home and getting rid of debt in bankruptcy court, GM has decided not to do what it never wanted to do in the first place - sell any part of its most prestigious overseas assets. While this decision was welcomed in Britain, where Vauxhalls are produced, by the local autoworkers union, the German government is displeased that GM would withdraw from the sale of the Russelsheim-based Opel because the sale was handled by a trust that also included representatives from the government and an independent panelist. GM is now instead seeking aid from Berlin and other European capitals.

This story isn't over yet . . ..

Breakdown

The latest news from Detroit, the city of lack of opportunity and of impossibility and the place where anything can go wrong (and does), is the elimination of several GM and Chrysler dealerships in the U.S. to get Chrysler out of bankruptcy and to save GM from it. Roughly forty percent of dealers representing each company are to go out of business as soon as possible.

Most of the dealerships being eliminated are small, local ones that stick to one GM or Chrysler brand, and each company hopes to cut costs on maintaining their franchises by relying on the larger dealerships. Wayne Dodge - a small dealership that handles the immediate area in Wayne, New Jersey, based in the township's Mountain View section - is one of the many small local dealers known for friendly, one-on-one service that is closing down. By cutting out local dealers - some of whom have been in business since the Wilson administration (including Chrysler-affiliated dealers who predate the company itself and probably started out selling Maxwells) - and staying with the big, impersonal dealers known more for their obnoxious radio commercials than for quality service or a strong commitment to their customers, GM and Chrysler are only proving themselves to be more out of touch with the consumer.

Either way, there'll be a whole lot fewer dealers, and thus fewer opportunities for reasonable, sound deals. A lot of customers are going to get screwed.

Meanwhile, GM is looking to sell Opel and Vauxhall to Fiat. Since these brands (Vauxhalls, sold in Britain, are just rebadged Opels with right-hand drive) are the crown jewel of GM's foreign operations, it only goes to show how far the General has fallen. To leave Europe and to sever itself from Opel's stellar engineering and design (not to mention the GM employees responsible for it) shows how diminished the once-mighty company has become.