Daylife/Reuters Pictures used by permission
America’s biggest motor manufacturer, General Motors, performed an abrupt U-turn [and has decided] to keep its European car manufacturing division, abandoning a proposed sale of Germany’s Opel and Britain’s Vauxhall brands at the eleventh hour.
Emboldened by encouraging global sales figures, GM’s directors emerged from a meeting of the company’s 13-strong board in Detroit to announce that an improvement in the European business environment had prompted them to change their minds about offloading the business, which employs 55,000 people, including 5,000 in Britain.
Instead of selling the operation to the Canadian car parts firm Magna, GM intends to spend €3 billion on restructuring the division “in earnest” – a process still likely to involve government aid and that may yet lead to significant job cuts…
“While strained, the business environment in Europe has improved,” said GM’s chief executive, Fritz Henderson. “At the same time, GM’s overall financial health and stability have improved significantly over the past months, giving us confidence that the European business can be successfully restructured…”
“We understand the complexity and length of this issue has been draining for all involved,” said Henderson. “However, from the outset, our goal has been to secure the best long-term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached today…”
Monthly sales figures released earlier yesterday provided an indication that business was improving. GM’s US car sales in October were up 4% in comparison with the same month in 2008 – the first year-on-year rise since January last year.
As a lifetime motorhead, I’ve spent an appropriate amount of time pointing out what I liked and disliked about GM. Aside from Zora Arkus-Duntov there hasn’t been much initiated in Detroit I found worthwhile. The Euro divisions were an occasional bright spot – even when they were prevented by the home office from offering much of anything new.
The good folks at gm-volt.com tweaked some discussion here [sorry, offline discussion] when they posted about Frank Weber leaving Volt and returning to Opel just the other day. I admit that none of us figured out this good news was coming. My guess is that he was shipped over to prep folks for the policy change.
None of this will be easy; but, I’m not the sort of critic who wishes the object of my criticism to fail.