Ending months of negotiation and speculation, General Motors has halted the sale of its European Opel division. GM has cited improving business and the importance of Opel/Vauxhall to its global operations as the reasons for the reversal. GM today posted its October sales figures, showing the first gain in 21 months.
The news came hard on Magna International, which had been working with the German government, GM, and partners on acquiring Opel. Known as a major parts supplier, Magna is a large, diverse company that has grown to become a manufacturer-for-hire for several automakers, and this purchase would have been a natural expansion for its business.
“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” said Fritz Henderson, president and CEO. “We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”
GM expects restructuring Opel will cost about $4.5 billion. Given the contributions Opel has made to the American-market products, the investment may be well worth it. Test drive the Buick LaCrosse to see what we mean.
As this news shows, the auto crisis is winding down, and the industry is increasingly focused on building cars, rather than focused on survival against tough economic odds. The way it is supposed to be.