General Motors Have Decided That They Will Keep The Opel Brand

Featured, Miscellaneous | Dean | November 4, 2009 at 23:40

The board of directors at General Motors have said that they are now, once again, interested in keeping the Opel brand. The details revolving around this saga are scarce, and the board has said that Opel and Vauxhall are important parts of GM success.

General Motors recently put 55 percent of Opel up for sale, where the most successful candidate for the brand was Magna International. The reason behind the sale was due to GM’s bad luck with money — in other words, their bankruptcy.

The strange decision to all of a sudden keep Opel must have raised a few eye-brows, if not tempers in the German government as they already said that they would sponsor funding for a Magna take-over.

A government spokesman, Ulrich Wilhelm, said “The government regrets the decision of the General Motors board to restructure Opel itself and to keep it in the group.” However, officials are now demanding that General Motors pay 1.5 billion euros in bridge financing provided by German state banks.

Regardless, CEO Fritz Henderson stated “GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.” This essentially means that GM might be able to receive some of the funding that would have gone towards a Magna deal.

Overall, Opel is a very important brand for GM and it felt a bit strange to think that it might belong to someone else. While Opel might not be known in the US, in smaller countries (South Africa), many people see GM as Opel. This is definitely a good decision, and GM should keep the brand.