GM Plows $5.2 Billion Into Opel Through 2016
- General Motors said it will invest $5.2 billion in Opel through 2016 to support the launch of new models, including the Adam minicar and Cascada convertible.
- "Opel is a key to our success and enjoys its parent company's full support," said GM CEO Dan Akerson in a statement.
- Through 2016, Opel will introduce 23 new models and 13 new powertrains, according to GM.
RUSSELSHEIM, Germany — In a surprising move, General Motors on Wednesday said it will invest $5.2 billion or 4 billion Euros in Opel through 2016 to support the launch of new models, including the Adam minicar and Cascada convertible.
"As a global automotive company GM needs a strong presence in Europe — in terms of design and development as well as manufacturing and sales," said GM CEO Dan Akerson in a statement. "Opel is a key to our success and enjoys its parent company's full support."
Through 2016, Opel will introduce 23 new models and 13 new powertrains, according to GM.
"A large part of the investments are going into the Opel model offensive," the automaker said.
Opel's 10-year plan is dubbed DRIVE!2022. The plan predicts a return to profitability by the middle of the decade.
The announcement was met with some puzzlement, especially after rampant industry speculation that GM might sell Opel or shift Opel's assets off its balance sheet into a joint venture with alliance partner PSA/Peugeot-Citroen.
"GM has made some baffling moves regarding Opel in Europe," said Michelle Krebs, Edmunds senior analyst. "The joint venture with Peugeot remains utterly puzzling. Now comes the announcement that GM is spending yet-another 4 billion Euros on a long-time, money-losing company in a market that isn't expected to turn around perhaps until decade end.
"Is this throwing good money after bad? Indeed, Opel has some value to GM, particularly in research and development. But perhaps this latest very substantial investment would be better invested in Chevrolet, GM's fast-growing global brand," Krebs said.
Opel's European operations have lost $18 billion since 1999, according to Automotive News.
Edmunds says: Would the money be better spent on Chevy?