GMC Seeking stake for OPEL
The rumours about selling GM’s money losing unit,Opel-Vauxhall almost confirmed.General Motor Corp. is ceding their german unit.It is said that all European operations of GM are at stake.A few big shots formally biding for GMs’European ops,which include italian car manufacturers Fiat and Canada’s Magna International. RHJ International,the Brussels listed car part manufacturer also is a serious contender for the troubled GM.RHJ’s chances were boosted when it was supported by Klaus Franz,the head of Opel’s work council.The bid talks for GM which started last day gave the strongest indication that it is likely to file bankruptcy within the next two or three weeks.GM, which is expected to file for Chapter 11 bankruptcy protection in the US by mid June, said it wanted to choose a partner for Opel-Vauxhall by the end of May.
Meantime Fiat has also expressed their interest in G.M’s European operations and also their all time profitable Latin American business.With their very recent partnership with Chrysler LLC it seems Fiat has some very good think tanks on their side.Even in this recession era they are cruising with plans for acquiring Opel and a 20 percent stake in Chrysler.
There are news regarding the fall of the industry giants.Washington post reports that GM lost $1.1 billion in the first 3 months of the running year.This mainly due to poor sales,high labor and management cost,healthcare,pension costs etc.These costs are considerably higher than the overseas rivals like Toyota.A few decades ago half of the vehicles bought by americans where made by GM,its just a quarter now.Now even the industry is shifting too much to electric ,gas-electric hybrid vehicles.
GM’s loss of $1.1 billion is a steep drop from the $1.21 billion profit the company posted for the same quarter a year earlier.This year’s loss included a few one-time expenses related to restructuring in Europe and a few lay offs, but even excluding those the company lost $839 million.
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