If GM goes, what about Vauxhall?

Posted by Paul Horrell at 4:05 pm on Monday November 24, 2008

Vauxhall LogoLots of people have asked me this question recently: if GM is bankrupted, what happens to Vauxhall and Opel? And I’ve asked lots of people, including GM high-ups. No-one seems to know, or to be willing to say.

It’s likely any GM bankruptcy would be slowly executed. Opel and Vauxhall are separate entities from the American parent. So if they can ring-fence cash, they can probably keep trading in the short to medium term. But long term, their business is entirely founded on global synergies.

They buy stuff in global quantities to get it cheaper. They amortise design and development expenses across the globe.

For instance, the new Insignia was meant to be made in at least nine versions. The Vauxhall/Opel. A Saab 9-5. A Holden. A Korean Daewoo-Chevy. A Chinese Buick. A Saturn. A US Chevy. If that can’t happen because various divisions stop trading, the economic case for the Insignia falls off a cliff.

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  1. Scott365 said...
    Monday November 24, 2008 at 5:00 pm Link to comment Report comment

    I think its unfair to Businesses struggling to get by on a day to day basis if these three get the cash from the US gov…
    Why should these car firms be any different to any other company, for too long they been blowing money all over the place…
    They deserve every penny they don’t get!!!

  2. PetrolHead 247 said...
    Monday November 24, 2008 at 5:04 pm Link to comment Report comment

    I think a big german company like BMW will try to buy vauxhall/opel, and see it as a possible way to earn a bigger profit. Or just to have a bit more power in the car industry

  3. catersam said...
    Monday November 24, 2008 at 6:30 pm Link to comment Report comment

    Without wanting to sound like a communist, the GB government (or an EU consortium) should sort out a plan that if GM goes under, they’ll keep Ophall out of the poo. 50/50 private and government. It could reduce unemployment, too. Now why aren’t I in politics?

  4. Giacomo Randazzo said...
    Monday November 24, 2008 at 6:47 pm Link to comment Report comment

    The faster street car all around the world is not Bugatti Veyron, but the Koenigsegg CCXR edition

  5. AnonymouslyAnonymous said...
    Monday November 24, 2008 at 7:03 pm Link to comment Report comment

    mummy

  6. Jim Bob said...
    Monday November 24, 2008 at 8:26 pm Link to comment Report comment

    Even if GM does go bankrupt, it likely will not fail entirely. It will probably undergo Chapter 11 reorganization rather than Chapter 7 Liquidation. This will give them the chance to get out of the bad contracts that are killing them. In the US, GM currently pays for 3 retirees for every one working employee. These pensions are very expensive and mean that GM spends $2500 per car on average for each retired worker. This is why they can’t field a competitive average car. Their more expensive vehicles like large trucks, Cadillacs and Corvettes are good cars now, but this is because it is not as big a hit on a car costing that much. Unfortunately, GM was also hit hard by the subprime mortgage crisis. GMAC Mortgage (Homecomings Financial) held a lot of B/C paper as that was their primary business. It used to be said that GM was a finance company that also happened to make cars as many years GMAC was the only division that made money.

  7. BLASFEMAH! said...
    Monday November 24, 2008 at 9:22 pm Link to comment Report comment

    Cool, no more crappy cars!

  8. Lloydy! said...
    Monday November 24, 2008 at 10:39 pm Link to comment Report comment

    Just as long as Holden and vauxhall / Opel are saved, then i dont care about GM – Let them Crumble!!!!! :D Mwhaaaa! oops got a bit overexcited :)

  9. Crash Cash said...
    Monday November 24, 2008 at 11:28 pm Link to comment Report comment

    FINALLY! Someone uses “global synergies” correctly! Call the Pope! It’s a miracle!!

    Seriously though, GM has a rep on this side of the pond for making absolute rolling crap. Remember when JC tested the F-150? Well that was a tarted-up special-edition F-150 and it still had the build quality of a melted candy bar.

    I think this beating has been in the wings since the 1980s, and GM needs to go Chapter 11 in a big way, and the United Auto Workers need to go with it.

  10. Alex said...
    Monday November 24, 2008 at 11:33 pm Link to comment Report comment

    It’s think it is very unlikely that GM will go completely bankrupt. In these days governments are more than happy to bail out large companies, because in their eyes they form an essential part of the economy that need to be kept alive. And that’s true. If GM fall over not only the workers at GM (and all its divisions like Vauxhall and Saab) will be out of a job, but many more will be hit. Think about the suppliers of materials or ready-made components, the dealer network, all the companies that GM hired to support (like cleaning companies, accountant offices, legal firms, security and IT companies).
    However, supporting these companies brings along some very major risks. If a company doesn’t invest in new techniques and ideas it will eventually be overtaken be the competition. This is something that we have seen happening with GM over the last few years; the Germans are constantly innovation and the Japanese are not far behind. GM, however, is still relying on old techniques and still building models that the Germans would have killed off about ten years ago.
    In a normal economic situation GM would either have been forced to invest, innovate and reorganize or gone bankrupt.
    Now this credit crunch has come along and problems arise quickly. Everybody panics and thinks that this is all the result of the credit crunch, but I bet it isn’t. I think that all these problems would have arisen in the coming years without the credit crunch as well.
    So GM would have been forced to make changes anyway without the willing support of a government. Now though, they are getting support from the government and what they do with it is simply keeping the company alive as it is. The government is just supporting an industry that has no future in it’s current form. They are keeping an industry alive that in normal circumstances would have died out naturally anyway. They are doing this on the back of an argument about employment and preventing people from losing their jobs. But instead of keeping the jobs intact artificially, the government and the industry should be thinking ahead and realize that GM in it’s current form has no future. They should start reorganizing and retraining people straight away, instead of just pumping money in a bottomless pit.

  11. leftbas said...
    Tuesday November 25, 2008 at 1:37 am Link to comment Report comment

    I have my doubts about GM going completely under the water. They managed to survive one recession, I think they can do it again. Of course, that was back when the American auto industry was admittedly a lot stronger. But I have a hard time believing that all their major shareholders would be willing to sit idly by while Wagoner drives that big train right off the cliff. I’m also surprised he still has a job, but that’s not my point.

    And, by the by, that F-150 was a Ford product, not a GM. And not all of us Americans drive pickups. Some of us actually like smaller, more reasonable cars.

  12. Cavyboi said...
    Tuesday November 25, 2008 at 1:52 am Link to comment Report comment

    “8. Crash Cash said…

    Remember when JC tested the F-150? Well that was a tarted-up special-edition F-150 and it still had the build quality of a melted candy bar”

    Erm… the F-150 is a Ford, nothing to do with GM, apart from a competitor

    A real example of GM crap is the Vectra B, but they haven’t done bad since then.

  13. Convict Stock said...
    Tuesday November 25, 2008 at 2:43 am Link to comment Report comment

    Interesting question, and more-so now that the Big 3 are being forced to get on their knees and beg (yet people like CITIGROUP can get $300+ without asking?), GM are getting closer to chapter 7 and bypassing 11 all together!
    I reckon if congress continue on their way, Mr Wagoner should just turn around and say fine we’ll close down in the US and Import everything! Hmm let’s see, Large RWD = Australian Commodore, Medium = Vectra & Insignia, Small Quality(ish) = Astra, Small Cheap = Daewoo anything & and trucks = Canada Mexico Brazil and a multitude of other small countries. Huge drop in wages bills, no pension plans or health care plans and the quality would more than likely improve.

  14. Jim said...
    Tuesday November 25, 2008 at 4:28 am Link to comment Report comment

    Simple answer–Vauxhall and Opel are wholly-owned divisions of GM. If GM goes under, Vauxhall and Opel (and Holden, and Daewoo, and all the rest all over the world) go down with them.

  15. St!g said...
    Tuesday November 25, 2008 at 7:09 am Link to comment Report comment

    Good riddance.

  16. RG said...
    Tuesday November 25, 2008 at 8:25 am Link to comment Report comment

    I really hope GM don’t close their doors. If they go, Chevy goes and if Chevy goes no more V8s and if there are no more V8s, HSV is history

  17. Skint said...
    Tuesday November 25, 2008 at 8:49 am Link to comment Report comment

    Someone will buy vauxhall for there name and badge and stick it onto there own crap cars. Goodbye Vauxhall lol

  18. arnold w. sta. prisc said...
    Tuesday November 25, 2008 at 9:58 am Link to comment Report comment

    hi tg staff iam arnold i 12 years old .please help me find cheap and cool sports car.then if you find me.that is my favorite sports car.i choose the nissan 350z.but i dont like her design.please help me find my favorite sports car.

  19. Anonymous said...
    Tuesday November 25, 2008 at 10:34 am Link to comment Report comment

    tough shit if you build bad cars you get bankrupt.why doesnt gm sell opel and stay open for another week.the germans are protecting opel anyway.let gm go bankrupt the us cant reward stupidity by way of 50 billion dollars.

  20. Anonymous said...
    Tuesday November 25, 2008 at 10:52 am Link to comment Report comment

    meh, if it all turns to custard the chinese will buy them. Then we’ll see some truely horrendous cars.

  21. nick1982 said...
    Tuesday November 25, 2008 at 11:16 am Link to comment Report comment

    I dont see the differance with Banks and Car Companies or House Builders if they fold it will send thousands of people out of work. All of them have made lots of money in good times and now times are bad need help why arnt the share holders stumpping up the cash.

  22. Andy Hammond said...
    Tuesday November 25, 2008 at 12:01 pm Link to comment Report comment

    My uncle told me last night that Vauxhall was going into administration but not that soon. I will say that Ford will take over vauxhall and make them a descent company at last.

  23. Dynamoo said...
    Tuesday November 25, 2008 at 12:59 pm Link to comment Report comment

    Looks like another possible acquisition for SAIC/Nanjing Motors.

    European competitors won’t want to spend the money on buying an albatross. After all, they will all benefit from GM going under. The Chinese seem to have the money and the will, maybe the Tata group too.

    Yes, “global synergies” is right on the button. Vauxhall is just a badge engineering exercise, and Opel is not much better.

  24. PG said...
    Tuesday November 25, 2008 at 1:00 pm Link to comment Report comment

    I don’t know how the holding GM-Europe is, but i saw what happened during the FIAT crisis, because i live in Turin. No chances without cash and new investors…

  25. Dynamoo said...
    Tuesday November 25, 2008 at 1:21 pm Link to comment Report comment

    Ironically, Fiat’s current improvement when it comes to models and sales is partly due to GM who had to pay $2 billion to Fiat to extract themselves from a joint venture agreement. $2b is a lot to a company like a Fiat and it was reinvested in the product line.. to GM that’s just the amount of money they lose every two months.

  26. My mind thinks... said...
    Tuesday November 25, 2008 at 1:47 pm Link to comment Report comment

    gm goes bust and will be forced to sell it’s assets which include all the factories they own all the dealership rights and the BRANDS vauxhall, saab, Opel, chevy etc are all considered assets if u think about it, gm goes bust every1 working for them loses jobs factories close dealers sell there stock and carry on servicing etc parts supply is still needed for dealers etc for cars out there and untill somebody buys a brand and a factory to build the beeter popular cars of that brand things will be bad, atleast if gm goes bust the crap brands and crap cars will die off crysler and ford are different they are manufacures that own other brands so for them selling off is the best option, like ford started doing with jag/land rover and Aston, but they need to use the capital gained to improve there cars and quality of them

  27. Blowfeld said...
    Tuesday November 25, 2008 at 1:59 pm Link to comment Report comment

    I’ll buy Vauxhall for £1

  28. KevinB said...
    Tuesday November 25, 2008 at 2:33 pm Link to comment Report comment

    When you think about it: Opel does all the development for the other GM brands in Europe.
    And Opel did well in recent years and was forced to give all the benefits to the GM mother.
    Opel unlike GM has no problem on liquidity.
    If GM suvives it will keep it´s Opel brand and sell Saab, Vauxhall will survive, maybe only as a badge. Ellesmere Port would be probably shut down completly.
    If GM doesn´t survive Opel will be saved by the German goverment and easily find new investors.
    Probably not from the big german manufactures, because of their bad experiences in the past.

  29. Dynamoo said...
    Tuesday November 25, 2008 at 3:07 pm Link to comment Report comment

    KevinB, it turns out that there *is* a German bid to acquire Opel for GM for €1b (see http://au.news.yahoo.com/ a/-/world/5157284). No mention of Vauxhall in that article though. The bid looks a bit doubtful when you look into it.

    Opel appears to have 26,000 employees in Germany, so you can see that the German government would WANT to step in.. the question is, would they be ALLOWED to under EU competition laws?

  30. Dynamoo said...
    Tuesday November 25, 2008 at 3:12 pm Link to comment Report comment

    “for GM” should be “from GM”. That makes *much* more sense :)

  31. KevinB said...
    Tuesday November 25, 2008 at 6:41 pm Link to comment Report comment

    Dynamoo, this wasn´t a serious offer, just some solarpowered dudes looking for some promotion.

  32. thunderacer said...
    Wednesday November 26, 2008 at 6:00 pm Link to comment Report comment

    i dont like vauxhall although their VXR models are great.

  33. good said...
    Wednesday November 26, 2008 at 10:04 pm Link to comment Report comment

    thank goodness.

    i hate vauxhall

    they are crap

  34. x said...
    Thursday November 27, 2008 at 3:55 pm Link to comment Report comment

    There are some really pathetic responses here to what is a very serious issue. Vauxhall / Opel are only badges, it’s all General Motors Europe and if Opel is bought Vauxhall goes with it, it couldn’t exist on its own. But whether any new owner would want to keep it going is another issue?

  35. KevinB said...
    Friday November 28, 2008 at 4:29 pm Link to comment Report comment

    It looks like GM is going to sell Saab, Pontiac (?) Saturn (??) and they have been looking for a buyer for Hummer for some time.
    They are also thinking of selling their property in Luton and their Saab Office building.
    Which seems like a pretty hopeless effort – GM is burning 1$b per month.

    Some say when the right offers come Opel and Vauxhall will be sold together. Possible Buyers: Great Wall (China), Toyota.
    VW would probably not be able to buy Opel because of competition laws, although the still have a big bunch of cash left (Porsche).
    BMW and Mercedes are not in the mood of buying another car company due to their bad experiences .
    It´s VERY likely that GM goes into bankruptcy, which doesn´t mean the ending of GM. But maybe they get rid of all their retirees which will be bailed out by the US goverment.

  36. Mondyman said...
    Friday November 28, 2008 at 7:51 pm Link to comment Report comment

    Money thrown into a bottom-less pit, remember what happened to the boxes on wheels Rover made, no amount of cash could do any good for them.

  37. Mikeado said...
    Saturday November 29, 2008 at 4:26 pm Link to comment Report comment

    So, how easy would it be for Vauxhall to separate from GM? Would they need to be sold?

    If the (TG Award-Winning) Insignia is the start of a new Vauxhall, then I’d buy Vauxhall and see where it goes. If I had money.

  38. I remember BL said...
    Wednesday December 3, 2008 at 4:22 pm Link to comment Report comment

    I’d badge them all Opel

  39. RichT said...
    Wednesday December 3, 2008 at 4:50 pm Link to comment Report comment

    Whilst I do feel sorry for anyone losing there job lets be honest: Vauxhall / GM product is crap and has been for years.

    I had a Vectra – enough said: I won’t be crying if they go, which they won’t……..

  40. Ender said...
    Thursday December 4, 2008 at 11:33 pm Link to comment Report comment

    I can’t believe that you lot are gleefully awaiting the demise of one of the last remaining car firms that actually puts soul and passion into their cars.
    Let’s face it, Japanese cars are white goods, except for the hideously overpriced GT-R, which is just a PS3 with wheels anyway.

    Corvette
    CTS-V
    Firebird
    Camaro
    VXR8/G8
    Astra VXR
    Sky/Solstice

    Surely you wouldn’t consider these bad cars..
    GM has always excelled at one thing- bang for buck; they make the fastest cars in their respective classes for the least money- Road and Track did a test where GM’s Chevrolet Cobalt SS ended up beating an Evo X around a racetrack! It’s too bad you Brits don’t get that car; I’m sure it would sell far better than the abominations rebadged as Chevrolet there. Considering it’s got a 2L Turbo I4 with 260BHP and no lift shift and launch control and only costs the equivalent of £15000… yeah, I’d say that’s good value for money.

  41. KevinB said...
    Friday December 5, 2008 at 11:53 am Link to comment Report comment

    and they made always the most crap in their class as well! If you´re looking for a hatchback – you´re better off in a VW than a Vauxhall – sportscar – rather the much more expensive, slower 911 or aston V8 than a corvette, VRX8 rather a smaller M3, and so it goes on and on…
    they may be fast and cheap, but I always have the feeling that I bought something cheap. which they are! when I spend a big bunch of cash on a car, I want to own a quality product. not just a big engine attached to a wheely bin.

  42. Mikeado said...
    Monday December 8, 2008 at 1:51 pm Link to comment Report comment

    Ender, you clearly know nothing of the GT-R.

    But we should have some of the US Chevys. Not all of them, just the Cobalt, Corvette and Camaro (is that actually being made yet?). But consider shipping tax. The $100,000 ZR1 is about twice as much over here (£100,000).

  43. Big Dave said...
    Friday December 12, 2008 at 3:00 pm Link to comment Report comment

    I cant believe that people are saying Vauxhall are crap. Of course its all a matter of opinion. Recently there range has become one of the strongest around, The Corsa is great, Astra is great, Signum is great, Monaro is Great, VXR and VXR 8 are great. All good cars and great looking, to be honest Ford is a much weaker proposition, that many Vauxhalls sell in the UK they cant be that bad.

    I have owned a number of Vauxhalls since the late 90s an they have all been superb.

    Yes the build quality isnt as good as some but then they are a lot cheaper. If you expect a BMW or Audi build buy one…..you dont shop at Primark and expect designer high qaulity do you?

    Currently I own an Astra MK4 over 100000 miles and no trouble at all. I previously had a VW Golf MK4 and the build quality (tonnes of rattles and niggles on Golf only 60000k) the Astra is built better and the engine is far superior to the 1.6 heap of unreliable junk in the Golf with its love of 2 gearboxes a year.

    Vauxhall make good cheap reliable cars on the whole (the Vectra is a mistake, but so was the last Ford Scorpio, the new Focus is junk too compared to the old one), I would certainally miss them, id have to buy a Ford for the same money and their aftersales is as bad as VW.

  44. Don Mateo said...
    Saturday December 13, 2008 at 7:47 pm Link to comment Report comment

    I can’t believe all the people on here saying Vauxhall make bad cars. OK they may have made some rubbish ones in the past and not all the cars they make are at the top of their respective classes, but there are plenty of worse cars out there. It might be that Vauxhall/Opel is in a similar situation to Ford of Europe i.e. doing much better both financially and in terms of product than its parent company in the US, so maybe it would be able to survive as a separate entity.

  45. Steve Sims said...
    Saturday December 13, 2008 at 8:50 pm Link to comment Report comment

    If you want to see real rubbish look towards France. In comparison Vauxhall/Opel produce good cars.

    How Citroen, Peugeot and Renault are still in business is beyond me, their cars always have and always will be utter rubbish.

    They are unreliable, poor build qualiy rot boxes. Look at the side of the motorways the majority of broken cars are French, the number of broken down French cars far outweighs the number of Vuaxhalls seen billowing smoke on the hard shoulder and there must be at least 2 times as many Vauxhalls on the road compared to French cars.

  46. john john said...
    Sunday December 14, 2008 at 11:31 pm Link to comment Report comment

    i dont care about vauxhall just as long ford pull through. i cant and dont want to see ford not appart of motoring. they have done much much more for the car than vauxhall has ever done.

  47. RobS said...
    Monday December 29, 2008 at 10:29 am Link to comment Report comment

    Europe make transport. Chev Chrysler and ford make cars.
    If they need to survive…scrap the subsiduaries. Australia also makes a Holden & Falcon…Chev derivative and a ford side order. If need be scrap them too.

  48. mr t welshboy said...
    Monday December 29, 2008 at 9:52 pm Link to comment Report comment

    not trying to sound communist, but the british government should buy vauxhall if necessary- at least then the taxpayer can have a say in what cars are developed- for the better

  49. rossco said...
    Monday June 1, 2009 at 2:28 pm Link to comment Report comment

    my mum is due to pick up her new corsa this weekend should she be worried

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