Or the story of the GM Vauxhall/Open fiasco
During the 1970’s, 80’s and even 90’s GM’s Vauxhall and Opel had the biggest selling models in Europe. In certain markets they dominated their sectors, with compact executive (also known as rep(resentative) mobiles) being one such example. Their Astra (Opel Rekord) and Cavalier (Open Ascona) were reasonably well regarded as being technically more advanced and reliable than Ford’s miserable old Escort / Cortina combination. They were often better equipped.
But that level of dominance doesn’t come without arrogance and while Ford realised the errors of it’s ways and created the Ford Focus and Mondeo, Vauxhall continued to sell essentially slightly re-bodied versions in the new Astra and Cavalier replacement Vectra.
What’s more, the emergence of increasingly better made and better spec’d Japanese and Korean cars starting to dig into their market share. Their purchase of Saab proved to be a disaster for both GM and Saab.
Pretty soon Vauxhall went from being every car journalists wet dream to being the butt joke of every Jeremy Clarkson review.
They lost their mojo and nothing appears to be helping them get it back. Even recent changes to the line up with the Insignia and Astra just don’t seem to have them make the sort of sales they were used to to long ago.
Today the compact executive market is dominated by the once “out of reach” cars like the BMW 3 series and Audi A4; as companies tend to hold onto vehicles for long and returning residuals are more important than initial outlay.
Step forward to today and GM has finally agreed to throw in the towel and is selling both Vauxhall and Open to French rivals Peugeot / Citroen, formally known as PSA Group for €2.2 billion. A figure which actually represents how much GM has been loosing annually from Vauxhall / Opel for the last 16 years. According to GM themselves, they have lost $18 billion.
However, in order to sound less like a bunch of inept managers, GM has a spin on the whole thing. From the BBC story.
GM chairman and chief executive Mary Barra said it had been a difficult decision to sell Opel and Vauxhall, and insisted the business would have broken even in 2016 had it not been for the UK’s decision to leave the European Union, which caused a sharp drop in the value of the pound.
So it’s the #brexit vote and drop in the value of the £ that’s the issue. Not the $18 billion in losses.
However, if you want a fairer assessment of the situation, you might want to to check out the Financial Times version of events. Their headline
Peugeot owner PSA to buy lossmaking Opel business for €2.2bn
And then goes onto say;
The deal will see GM, which operates under Vauxhall in the UK and Opel in Europe, finally cutting ties with Europe after a decade of losses in the region. The company has racked up more than $8bn in losses there since 2010.
What is also missing from FT write up is Mary Barra’s #brexit statement. I guess they didn’t have a narrative to getting forward.