A Stronger GM allows for Greater Global Presence
Canadian Auto Press

With today’s announcement that General Motors Co. will not be selling its European Opel and Vauxhall brands to Canada’s Magna International after all, but rather maintaining them as part of its global strategy, it makes a person question what that global strategy might become now that the Detroit-based automaker is seemingly on the mend.

Opel Flextreme

“Given an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM’s global strategy,” a prepared statement read, “the GM board of directors has decided to retain Opel and will initiate a restructuring of its European operations in earnest.”

This news will no doubt infuriate Magna International and its would-be Russian partner Sberbank, which negotiated in good faith and by doing so the former company took great risk to its core business as an automotive supplier. By attempting to take over one of Europe’s largest brands, Magna ruffled a few feathers, but GM is likely not all that worried about the Canadian concern; it has enough to worry about on its own.

Just the same, the auto giant is looking healthier now than it has in years, and therefore will present its own plan for restructuring its European divisions to the German government and other jurisdictions involved in the sale.

“We understand the complexity and length of this issue has been draining for all involved,” chief executive Fritz Henderson commented. “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.”

But what is “GM’s global strategy,” as stated in the press release, with respect to Opel/Vauxhall? After all, that strategy incorporated a US division that has now been scuttled after a proposed deal with Penske Automotive Group fell through. So, does GM’s Saturn brand have a chance at rebirth now that its European donor car supplier is back in the fold?

While it might at first seem like an obvious choice to make, Saturn being the North American arm for a brand that hasn’t been sold here in decades, with the US and Canadian governments involved in the final decision, as well as labour unions and other interested parties, GM would have to put forward an extremely sound case followed up by some impressive fourth-quarter and fiscal year 2010 projections.

No doubt, Opel’s return to the GM fold will only fan the flames of Saturn devotees and cause speculation amongst auto pundits everywhere.