Some Saab drivers felt reminded of 2009 by the headlines of the past few days - when GM decided to shut down Saab for good. A déjà vu? Only superficially, because 2017 is not 2009 and things have changed fundamentally.
GM 2017 is not GM 2009
GM is no longer the company it was in the year 2009. At that time, one acted on the abyss, today one acts from a position of financial strength. The old, traditional way of thinking about playing in the forefront of every car market in the world is no longer valid. Almost unnoticed, GM has moved away from markets that do not generate revenue. In Russia, Australia, Indonesia and Thailand, the activities were shut down. Investments in India and Brazil are under scrutiny.
The strategy of returning to financial strength on the one hand and no longer playing along everywhere at any cost on the other is showing success. GM CEO Mary Barra nearly doubled its return on capital employed from 2014 to 2016. It is only logical that they want to withdraw from Opel after almost 20 years with continuous losses.
Opel. Re-park in the head. But where?
You can't blame Opel for not taking advantage of the opportunities since 2009. There have been good approaches. The parking in your head - campaign for example. It got off to a brilliant start and could have been the beginning of a comeback. But in the end, nobody at Opel was able to explain what or who to move to where.
Opel needed a new image. But where do you get it from a manufacturer who wants to do everything, but can never do it really well due to a lack of resources. The cars are good, they are reliable. But they don't inspire, they are average. And if something smart did leave the Opel factory, then you didn't see the opportunities.
The best example is the Adam small car. Everything done right. Basically ! But where other manufacturers created a whole family of small cars from a sales success, Opel stayed with one model. With the 500, Fiat shows how it could work, at the other end of the price list, BMW is celebrating the Mini.
While GM changed, sentimentalities set aside and decreed for profitability, Rüsselsheim fell back into old habits. On the list of self-registrations Opel permanently occupies the first places. Almost 50%, every second Opel, is pushed into the market as a proprietary or dealer approval. That is not healthy, and the way to recovery of the brand is not at all. What good is it if you offer premium-class features in the compact class, but then squandered cheap?
Opel is worn out. On the one hand, the premium manufacturers rob the brand with the lightning bolt with low leasing rates. On the other hand, the Koreans attack. With technology that has long been more modern than the grayed-out mediocrity that Opel has on the shelves. And with guarantees and prices that you have nothing to oppose.
The Vauxhall and Brexit problem
Companies that disappear from the market have excuses. It is then always due to unforeseen events that occur suddenly and unexpectedly, which hit weak, troubled brands particularly hard. One of these events is the Brexit.
Opel operates two Vauxhall works on the island. 4.500 people are on payroll, 85% of UK-built vehicles are exported. If the island leaves the EU with the announced hard Brexit, then for the low-profit compact cars on import into the EU 10% of dues become due.
The Opel sister brand Vauxhall is the number 10 in Britain with 2% market share. Since the Brexit vote, the market is weakening, sales are steadily declining and, in return, discounts are rising.
The exit. Questions and risks.
Opel is responsible for 12% of the annual development work in the GM Group. It is difficult to assess what effects the sale of Opel, with this relatively high share, will have. As was the case with Saab, open orders are likely to be completed. Then the relationship is ended.
On the production side it looks relaxed for GM. The real models of success in the corporate mix do not come from Opel factories, they roll out of Korean factories. The Opel Mokka is a Buick Encore from Korea, which provides huge quantities in China and North America.
GM can lean back comfortably because all patents and rights that Opel uses are parked in their own company on the other side of Rüsselsheim. We remember Saab, the rights to the 9-5 NG and 9-4x. The situation at Opel is comparable in this respect, and it will not be uninteresting to see what the solution will look like for the PSA Group as a potential buyer.
Profiteers and losers
With the entry of PSA it could come to the clear cut in the German works. The most expensive location at Opel is the main plant in Rüsselsheim. With over € 50,00 per hour per employee, production is more expensive than in any other plant, even more expensive than in the French PSA factories. Relatively cheap is England, with something over 20,00 € for the wage hour. Nevertheless, it is considered agreed that one of the two factories is settled.
The employees in the Polish Opel plant need hardly worry. The wage hour is just under 10,00 € and is the cheapest in the European comparison.
If the sale takes place, the unofficial date is March 9, 2017, then two companies could be among the winners. GM would no longer have to compensate for losses and would have around a billion euros more in its pocket every year. That could be distributed to the shareholders. Or, as industry rumors say, you could join FCA (Fiat Chrylser).
Extremely quiet behaves another actor. Dongfeng is involved with 14% in PSA, a German brand would certainly not be wrong to the Chinese. In Rüsselsheim, one could then develop for China. As do former Saab engineers in Gothenburg at CEVT. Or at Dongfeng, in Innovatum in Trollhättan. Which almost closed the circle again. Because Dongfeng was traded in the last few days as a possible, another shareholder in NEVS.
A rumor, of course, maybe a déjà vu. And definitely unconfirmed.