Will The Sale of Opel Vauxhall By GM Make America The World Automotive Leader?

By George Polgar

PHILADELPHIA (CBS) — Last week’s sale of German Opel and British Vauxhall carmakers by General Motors to the Paris based PSA Group which owns Peugeot and Citroen seems like some far off intrigue of little interest to Americans.

And yet, the bottom line is in U.S. dollars and sets up a final coup that could forever change the domestic auto industry.

General Motors ownership of the German Opel company dates back to 1929. Skipping over the turgid era of Hitler and World War II, the comeback and expansion of Opel and Vauxhall from the mid-century hit the wall hard back in 1999.

Since then GM has been steadily losing money in Europe while supporting a workforce of some 38,000 in Germany and the UK. The cost to General Motors in the last year alone represented a loss of 5 percent of earnings per share to stockholders, or $2 billion in cash reserves.

The potential final act of this continental drama is even more significant. The sale eliminates a product overlap in moderately priced passenger cars, that opens the door to the merger of GM and Fiat Chrysler Automotive.

Comments

One Comment

  1. Andrew Kear says:

    GM instead of competing in the world’s toughest market surrenders. GM is now about as popular in Europe as American Football. This also assures GM will be behind both Toyota and VW in world market share for the next century. GM is now smaller and more insignificant that it has never been. Watch GM’s market share now tank in America as well.

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