GM Decides to Keep Opel After All
The company decides their new life will include an old flame
By Brendan Moore
General Motors has announced that they will keep Opel after all, after months of contentious negotiations aimed at selling a controlling stake in their German operating unit.
The board of GM made the decision earlier today, dealing a death blow to Magna International’s dreams of acquiring Opel and becoming an automotive manufacturer.
When it came right down to it, GM decided they just couldn’t envision a future without their German subsidiary, which provides most of their presence in Europe and is the main source of their fuel-efficient global vehicle platforms.
GM was able to reverse itself on their decision to sell Opel by virtue of their recently improving fortunes. GM stated that it will perform the necessary financial restructuring at struggling Opel as soon as possible, and move forward towards that goal with the help of various state incentives that were offered to the previous potential buyers of the company.
I think GM has made the absolute correct decision in deciding to keep Opel.
One, they need Opel’s small car expertise.
Two, if GM is going to be a player in a global sense, they need to be, well, global.
Three, there is no way to foretell the future, but the decision to sell Opel may have come back to haunt GM from a competitive perspective as Opel’s intellectual assets may not have been adequately protected under Magna’s stewardship.
I also want to give some serious props to GM’s new board, who obviously is not the same risk-averse group that GM was saddled with previously. The easiest thing to do would have been to keep going down the path that was already set, go along with the complex plans already set up for Magna’s purchase of Opel, but the board did what was right for GM’s future. GM’s board is more or less telling the company that the best defense is a great offense. Which, let’s face it, is true – you generally cannot save your way to first place in business. You have to sell something. Kudos to the board members for pushing GM to realize their goals.
Following GM’s announcement, Magna’s co-chief executive, Siegfried Wolf, said: “We understand that the board concluded that it was in G.M.’s best interests to retain Opel, which plays an important role within G.M.’s global organization.” He pledged to “continue to support Opel and G.M. in the challenges ahead.”
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