Monday 9th March 2009

Vauxhall/Opel in 'Terrible Trouble'

No escape route yet for GM

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Vauxhall and Opel are in ‘terrible trouble’ as their parent company General Motors moves closer to filing for bankruptcy in the US.

That’s the frank verdict of business secretary Peter Mandelson who says the UK and German governments are locked in a debate about how - or indeed if – they should intervene to support moves to spin-off the famous European brands as a separate European entity.

The dilemma is likely to be high on the agenda when Gordon Brown meets German chancellor Angela Merkel who is visiting the UK next weekend.

Reports say that two governments are pressing GM for convincing restructuring plans for the two European GM brands. Opel has already requested nearly £3bn in emergency funding from the German government - which has expressed strong anger about the lack of support from GM for its operations in Europe. UK officials say they still have no specific proposals from Detroit as to the level of support that Vauxhall is likely to demand.

Vauxhall employs 5000 people in the UK while Opel employs as many as 25,000 in Germany.

[CampDavid]

Big question, is the european arm actually making any money?

I think in a stable economy Opel should be a viable company, unlike most GM kit, they actually make cars that people want to buy. Not me, obviously, but other people

[PhilJames]

CampDavid said:

Not me, obviously, but other people

Our govenments should wait for GM bankrupcy and then buy Vauxhall/Opel for peanuts; protecting jobs and not wasting taxpayers money. That's my overly simplistic view anyway.

[chickensoup]

Hope they dont save it, as I think it would just be delaying the inevitable
Governments cannot afford to invest in new platforms & new engines, so any bail out will be short term & just leave tax payers obliged to cover redundancy & pensions

Edited by chickensoup on Monday 9th March 12:22

[C43]

why not use all those engineers and production facilities to produce wind turbins etc and make green energy and keep jobs. No one needs new cars any more so no point in keeping it going as it is. However we do need energy and jobs.

[Beefmeister]

C43 said:

why not use all those engineers and production facilities to produce wind turbins etc and make green energy and keep jobs. No one needs new cars any more so no point in keeping it going as it is. However we do need energy and jobs.

I think you're on the wrong site...

[jimjim150]

C43 said:

why not use all those engineers and production facilities to produce wind turbins etc and make green energy and keep jobs. No one needs new cars any more so no point in keeping it going as it is. However we do need energy and jobs.

I assume that you are joking, considering the new Lotus you own.

[PhilJames]

Tax payers will have to foot the bill for unemployment, that's why they are worried about it. I don't think the British govenment really give a pony about the auto industry.
If VX and opel are profitable and it's the US letting the side down then it may be worth saving and selling off in the future. I don't thing state ownership would be any good long term.

[wab172uk]

chickensoup said:

Governments cannot afford to invest in new platforms & new engines, so any bail out will be short term & just leave tax payers obliged to cover redundancy & pensions

Edited by chickensoup on Monday 9th March 12:22

Good point. Let the Germans save it instead.

Although if it is saved, Flash will no doubt let the UK take most of the share. Meaning UK tax payers pay for German redundancy & pensions.

[bencollins]

C43 said:

why not use all those engineers and production facilities to produce wind turbins etc and make green energy and keep jobs. No one needs new cars any more so no point in keeping it going as it is. However we do need energy and jobs.

They might do that with the SAAB factory, it is being discussed!

Seriously though Opel/Vx can make money once they stop buggering about with too many different products in small volumes, i.e. Sigmas et al.
Corsa, Astra, Insignia are all good cars selling well (in the millions), its not like MGR.

[Gridl0k]

The Germans should sell Opel to John Towers for a tenner.

Makes as much sense as any of the other options, and has the benefit of dooming Vauxhall.

[Fetchez la vache]

Why do they bother keeping the Vauxhall name going?
The brand has been associated with making bland cars (with the odd exception) for as long as I can remember.

Unless the Opel brand is perceived as being even worse?

[Frimley111R]

Fetchez la vache said:

Why do they bother keeping the Vauxhall name going?
The brand has been associated with making bland cars (with the odd exception) for as long as I can remember.

Unless the Opel brand is perceived as being even worse?

I think that is unduly harsh. It is a mainstream manufacturer making some excellent cars these days (again, not like MGR). The brand's image will change as people get used to the quality cars they make. I don't own a Vauxhall but I can see they make much better cars than either, for example, Peugeot and more than a few others.

[Al 450]

C43 said:

why not use all those engineers and production facilities to produce wind turbins etc and make green energy and keep jobs. No one needs new cars any more so no point in keeping it going as it is. However we do need energy and jobs.

Top trolling!

[mrk4thom]

PhilJames said:

CampDavid said:

Not me, obviously, but other people

Our govenments should wait for GM bankrupcy and then buy Vauxhall/Opel for peanuts; protecting jobs and not wasting taxpayers money. That's my overly simplistic view anyway.

My wife bought a Vauxhall 18 months ago and its a great car. Bankrupcy would reduce the non-existant residual value even further, but at least Britain could buy the company, save the jobs and benefit financially on the other side of recesion, rather than bailout an American company. Anyway, what did they ever do for us, except show up to a world war too late so that our empire would crumble.

[rabw]

Fetchez la vache said:

Why do they bother keeping the Vauxhall name going?
The brand has been associated with making bland cars (with the odd exception) for as long as I can remember.

Unless the Opel brand is perceived as being even worse?

Yes they are a dull and boring brand, BUT they must sell quite a lot of cars. Surely selling so many cars that are so un-specialist means that Vauxhall/Opel are profitable on their own?

[motormania]

chickensoup said:

Hope they dont save it, as I think it would just be delaying the inevitable
Governments cannot afford to invest in new platforms & new engines, so any bail out will be short term & just leave tax payers obliged to cover redundancy & pensions

Edited by chickensoup on Monday 9th March 12:22

Agree

I'm sick and tired of our governments spending our money trying to save failed businesses. Of course we get those who say we need to save the 1000's of jobs...

Well where was the government when I lost my job (twice) due to the Internet bubble bursting in the late 90's??? 1000's of jobs were lost all down to bad business models and no one helped us, in fact the Internet industry was laughed at for trying to grow faster than it could be sustained...

Well that's exactly what the car industry is doing, producing more cars than anyone can buy - it's bloody crazy.

[proe20]

has anyone actualy driven the new corsa, had 1 as a courtesy car for 2 weeks was horrible let it go.

[Gridl0k]

Worth mentioning because even these days I never see it come up - GMAC and FoMoCo Credit make waaaay more money than the car side of the business. They're loss-leaders, almost.

[J-Skid]

motormania said:

chickensoup said:

Hope they dont save it, as I think it would just be delaying the inevitable
Governments cannot afford to invest in new platforms & new engines, so any bail out will be short term & just leave tax payers obliged to cover redundancy & pensions

Edited by chickensoup on Monday 9th March 12:22

Agree

I'm sick and tired of our governments spending our money trying to save failed businesses. Of course we get those who say we need to save the 1000's of jobs...

Well where was the government when I lost my job (twice) due to the Internet bubble bursting in the late 90's??? 1000's of jobs were lost all down to bad business models and no one helped us, in fact the Internet industry was laughed at for trying to grow faster than it could be sustained...

Well that's exactly what the car industry is doing, producing more cars than anyone can buy - it's bloody crazy.

I'm not defending this, but it's not as simple as "letting it go". It's the same issue with the banks.

Once businesses get beyond a certain size (ie: massive) then if you simply
"let it go" the knock-on throughout the rest of the economy many times multiplies the job losses at that one business. Also with the car industry you end of with local pockets of mass unemployment (Longbridge / Corby and the steel industry scenario etc.)

[german tony]

The German press is currently up in arms about the recently emerged fact that the company posts a tax loss here, yet pays tax on it's earnings in the US & now wants German tax payers to bail it out when the only reason it needs any cash is due to some very dodgy accounting.