Some Saab drivers felt reminded of 2009 in the headlines of the last few days - when GM decided to close 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 The old, traditional way of thinking about playing in the forefront of every car market in the world is no longer valid.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 going back to financial strength on the one hand, no longer playing around at any price on the other, is showing success. GM CEO Mary Barra almost doubled the return on invested capital from 2014 to 2016. That you want to retire from Opel, after almost 20 years with continuous losses, there is only consistent.
Opel. Re-park in the head. But where?
One can not blame Opel for not having used the chances since 2009. There were good approaches. The Umparken im Kopf - campaign for example. It started quite brilliantly and could have been the start of a comeback. But even at Opel nobody could finally explain where you wanted to change what or who.
Opel would have needed a new image. But where do you get from a manufacturer who wants to do everything but can never really do that because of the lack of resources. The cars are good, they are reliable. But they do not inspire, they are average. And if something smart left the Opel factory halls, then you did not see the chances.
The best example is the small car Adam. Everything done right. Basically ! But where other manufacturers of a sales success create a whole small car family, it remained at Opel with a model. Fiat shows with the 500 how it could go, at the other end of the price list celebrates BMW 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 being wiped out. On the one hand, the premium manufacturers are robbing with light leasing rates in the area of the brand with the flash. On the other side, the Koreans attack. With technology that is far more modern than the graying mediocrity of what Opel has on the shelves. And with guarantees and prices that 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 performance in the GM Group. It is difficult to assess the impact of the sale of Opel on this relatively high share. Probably, as at Saab, open contracts will 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 sit back comfortably because all the patents and rights that Opel uses are parked outside of Rüsselsheim in its own company. We remember Saab, the rights to the 9-5 NG and 9-4x. The situation at Opel is similar in this respect, and it will not be uninteresting to see what the solution for the PSA Group will look like 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, unofficial date is the 9. March 2017, then the winners could count two companies. GM would have no more losses to compensate, would have a year round billion more € in the bag. These could be distributed to the shareholders. Or you could, as industry rumors say, 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.