Opel/Vauxhall

[Javelin]

I read today that Opel was bought by Canadian Magna, I wonder how all you Europeans think of this deal and what was this company like with GM running it?

Magna has been trying to find a way to build whole cars for a long time now. (they are a parts maufacturer) They have a number of platforms ready to go and entered into a deal with ford to build an electric they had but ford is going to build it themselves as a partnership. They tried to buy chrysler but it went to Cerberus instead . now ths Opel deal might make room for their other stuff. Most of my supliers have auto parts and tooling as their major business and this Magna news is good for those that do magna work.

[David Kilpatrick]

Good luck. In Britain, what was once a major industry is now almost a memory. My brother was plant manager for Unipart, which was the in-house (group) component maker for British Leyland. I think he lost his job around 1980, but thanks to a lack of tendering systems was able to secure some work doing overnight runs to take vital missing parts to different car factories, starting out with an estate car. Very often the entire production of a thousand cars would be halted because no-one had drawn down the right stocks of an indicator bulb, so he would be paid £1000 or something like that to drive to a parts supplier at 2 in the morning, load up with the stock, and break the speed limit doing 100 miles to the factory. His knowledge of where all the parts came from, and what was what, helped a lot. He ended up with a fleet of seven vans, a roster of full and part time drivers, and regular runs to Jaguar, Nissin, and all the other makers in the UK - along with several trips to Holland every week to bring back parts from Europe which had failed to arrive via the regular heavy haulage.

It made him a wealthy man and owns an entire block of flats and other properties in Oxford, which is one of the most expensive cities in Britain. He has never had business premises and ran the operation from a desk at home. Until a couple of years ago his entire computer installation was one Amstrad e-mail phone - during the life of his business, he ran it all using paper, the way they used to in the motor industry...

His story really explains why Britain no longer has a motor industry, or indeed many other industries. He earned his money because of the hopeless mismanagement of parts supply, which was only made worse by the philosophy of 'just in time' restocking and 'manufacture on demand' parts production (these were supposed to improve things by ending the old situation where a works would have, after a few years, entire warehouses full of unused parts stock for discontinued models).

About the time he was starting out as an auto parts courier, I was doing a lot of photography for the Sheffield steel industry - partly because my name was good in Sheffield, my father had retired from being British Steel's director of operations but was very well-known. This involved visiting the forges and finishers in Birmingham making car parts. It was nearly impossible to get decent pictures. Chassis components were covered in rust within days of being pressed; piles of rusty-looking pressings and forgings waited to be picked up and delivered, often stored outside in British weather. When treated (nitrate or phosphate) the pieces were dead black, when oiled or waxed to prevent rust (often over existing rust) they looked horrible - the forges were dirty, with huge Victorian drop hammers.

When I saw the state of the pressings, chassis, monococque, body parts, suspension, drive etc being sent to the car plants I realised why our cars only lasted three years before the paint began to bubble with rust from underneath.

My brother switched to buying Mercedes despite working for the British car industry. I have not had a British vehicle since we bought a Land Rover LWB Safari in 1990 and it leaked so badly it could not be left outside - and in three years of trying, could never be fixed either.

Opel was off the radar, I don't know what they make but it has not been sold in Britain under the Opel name for many years. I worked for a Vauxhall dealer doing PR, exhibitions and calendars in the 1970s and Opel was then a kind of superior option Vauxhall - you paid 25% more and got a slightly different Chevette or Cavalier or whatever. Everyone wanted an Opel Manta, and in the 1990s our son Richard got one for a while - a lovely red example. But sometime in the 1990s maybe they dropped the Opel line and made it all Vauxhall.

I have a framed photo still showing Adrian Paul, Minolta Club manager, as an 18-year-old driving his new Vauxhall Astra GTE through a river ford with a well-known glamour model of the time (1984?) standing up through the sunroof. The Astra GTE was the ultimate car for any 18-year-old to own and probably gives you some idea just how well the Minolta Club was doing three years into our new club operation.

I think they would do well by reintroducing the Opel brand as a sort of Lexus equivalent and making Vauxhall a Europe-wide 'standard level' brand.

David

[bfitzgerald]

I have been reading about this!

Being an Astra man 100%, won't buy anything else

The Magna deal looks about the best out there, thank the lord Fiat walked away..they were going to crush opel/vauxhall. GM retains I think a 35% share of the company, Magna are offering 10% to the workforce, and they own the rest..so it's now a part owned Magna/GM company. Seems reasonable enough. In the light of the situation, no doubt some will be laid off, but we trust it won't be too heavy in the UK.

I hope the brands get retained, and they should do. I will be honest..I dislike fiat cars with a passion There is probably no way I could ever have bought a vauxhall or opel again with them in charge. Punto= electrical problems all over the show, a really disliked car by mechanics.

Vauxhall is UK specific, over in Eire and the rest of Europe..Opel is the brand..but they are identical in many ways, bar obvious ones left hand drive etc..a few very minor spec differences. Other than buying a Japanese car..I will probably stick with Opel/Vauxhall. I won't even look at ford, you get that tin can feeling with many of them

[bossel]

I read today that Opel was bought by Canadian Magna, I wonder how all you Europeans think of this deal ...

In German press they use to call Magna Canadian-Austrian. Though I don't how, other than the founder, how much austrian it is. Maybe they refer to Steyr, which was bought by Magma some yaers ago.

...and what was this company like with GM running it?

It was Opels biggest problem ever to be ruled by some incapable "managers" in Detroit, who never understood the European market. GM was just trying to suck as much money from Opel as possible. They stripped them from their buildings and patents which were transferred to a US company. And then they had Opel pay for using these patents. Malicious. I hope they will do better without GM. Though I think GM keeps 30% or so - too much to create trouble, I'd have preferred a clear cut.

I think they would do well by reintroducing the Opel brand as a sort of Lexus equivalent

Opel is rather a competitor of Volkswagen, Fiat, Renault or Toyata. Not Lexus, Audi or BMW!

[KevinBarrett]

The view from the states is that two of our three largest auto makers, overburdened with pension-plans and labor unions put in place when they were giants, cannot make a competitive car fast enough to keep up with the economy and oil prices. They've relied very heavily on sales of full-size pickup trucks (Ford topped out at 980,000 F-series trucks one year), which nobody seems to want any more.

The result is that they're breaking up and leaning on the taxpayers. General Motors is axing and auctioning off brands--I forgot exactly how they're tied to Opel and Vauxhall, but we see a few of those in the form of a Saturn Sky and Astra as well as Pontiac G8 and GTO. Chrysler was up for grabs and needed to merge or die--Fiat had been the main interest there--but now it seems the United Auto Workers are the majority shareholder. In the meantime, these two companies are staying afloat with taxpayer money until they can pay back tens of billions of dollars of aide...which doesn't seem very likely.

[Javelin]

Well Magna generally always has employee ownership of the plants so the 10% to the employees isn't a surprise. he also only negotiates no stike contract with the unions. and he is pro union otherwise but ruthless in anything else that needs to be done. GM, as has been said is a victim of their own generosity. the pensions killed them. I guess nobody expected their retirees to live so long as they have.

Davids description sounds like the way AMC was run in the late 70's . Parts brought to the line in cardboard boxes.. lots of delays, stuff lost finished cars missing parts ect. untill the brampton plant was opened this was comon practice. contrast that with Ford in oakville a new vehicle rolls out every 20 seconds 3 shitfs 365 days a year when they are busy. They are really cleaning up now that the other makers are in trouble (well as much as the economy will let them). they happen to come out with a line of really appealing cars at the same time. and of couse their Pick-up truck is still the most sold vehicle in north america, I think thats really what kept them out of the mess the others are in and also they saw thw writting on the walland dealt witht heir finances before the economy fell apart.

Chrysler was never a factor. they had vrtually no overseas sales and the steam is running out of their chassis design that saved them in the 80's and really hasn't changed no matter what body they stick on it. I don't think they will be good for Fiat in the end.

Magna knows this business really well. they supply parts for everyone, Including Honda and Toyota it'll be very interesting to watch what happens with this. Fiat would have been bad for everyone,they had a really bad reputation by the time they were chased out of here in the 70's as did Renault in the 80's.

[caporip]

The Astra GTE was the ultimate car for any 18-year-old to own and probably gives you some idea just how well the Minolta Club was doing three years into our new club operation.

David

It was also a great car for a 28 year old to own in 1984 as I did. Lovely little motor - aaahhh memories.

Richard

[bfitzgerald]

Funny how things change!

http://news.bbc.co.uk/2/hi/business/8341485.stm

The deal is "off" And GM are to keep Opel and Vauxhall

I think this is good news, esp for UK workers

[bossel]

I am not sure this is good news, be it for german or uk workers or anywhere else in Europe. Having seen how they do business, be sure they will axe away where and how they want (and it's probably easier to fire people in the UK than in some european countries). I agree Opel is valuable and has the most valuable technology within GM, just GM doesn't know it. For them it's a playground they're messing around with since many years.

Not getting any further billions from the german taxpayer will not help.

The issue is, GM was controlling Opel since many decades without success.

I wonder why suddenly now, in the middle of the crisis, they think they can do better!

[Javelin]

well the magna owner isn;t very happy but his investors sure are. GM gets the government aid. also the deals magna worked out with GAZ (if GAZ is still interested) But o the downside Opel will just continue to make parts for other makers and probably expand in that regard. unless GM just lets the aid money run out and close it which they were probably planning to do anyway.

Bossel: I'm not aware of any special technology Opel poseses which would be so valuable? I though it was just the fact thtey were there and had these contracts with other makers for parts?

Maga was going to take a hit from VW and Mercedes if they had completed this deal. but they would have traded that for the doorway to the much larger russian market, which may or may not be closed now with GM. the uncertaintly with magnas parts customers is why Magnas investors didn't like the deal. they would have prefered Opel just continue to die.




Here is the story thats playing here. A lot on the embarrassed German government.

http://www.financialpost.com/story.html?id=2183054

[Javelin]

The issue is, GM was controlling Opel since many decades without success.

I wonder why suddenly now, in the middle of the crisis, they think they can do better!

The reason is GM was hamstrug with the dept is was carrying. mostly pensions, People don't die like they are supposed to. Now with the Automated dept wash bankrutpsy is they are out with most of their assets, pockets full, of tax money and rising sales.

GMs new Strategy is to corner the unions for concessions (hey .. worked here and worked on the government) and from now on the cafeterias will all offer free cigarettes and asbestos products like oven mits and ceiling tiles to all union employees.

[David Kilpatrick]

Pension funds can be very generous. There is a big poster in town for a consultancy which can get your pension increased by 50% if you can show evidence that you smoke, drink, or have developed certain medical conditions. I'm thinking of taking up smoking just for the extra annuity payback.

David

[bossel]

Bossel: I'm not aware of any special technology Opel poseses which would be so valuable? I though it was just the fact thtey were there and had these contracts with other makers for parts?

In what concerns modern economic engines, electronics, safety etc Opel and other Europeans (and japanese) car makers are at least a decade ahead of the "big 3" (that's not me saying that). Chrysler will be getting technology from Fiat (not really the top european car maker) to build more economic cars. Meanwhile Ford introduces the next generation of F150 with even larger V8 engines.

Opel could be even further advanced and play along much better with VW and Toyota if GM had supported them 10 years ago rather than trying to impose the US style in Europe. Fuel efficiency will become more important in the US. GM is alive due to 50.000.000.000$ taxpayer money and not because they are a successful car maker. The same incompetent "top managers" with huge pay checks that drove GM into bankruptcy still have the say. Sad.

Still, forgetting the past, I hope Opel will be successful (my brother in law is working for them...)

Not sure about that part-building business you mention? Opel designs and builds cars and buys parts from other companies. They don't buld parts to sell to others. That would be Magnas business.

[Javelin]

Sorry bossel I don't buy most of what you said here. I know what cars I can import into Canada. which ones don't need emissions work and which ones can't be made to meet DOT (US) and MOT (Cdn) safety standards. Most of what is sold in europe since the 80's can't be brought here under any circunstance because of that (they actually can order cars destroyed at the border.. Porsche 949 for example. Theres even US models that can't be brought to Canada. most of the GEO line can't make it or any of those GMs where the seatbelt tied you to the door mostly mid sized pontiacs and Buicks for example.

F150 has for years been the top selling vehicle of any kind year after year in north America. once in a while a sedan Like Accords or Taurus beats it. but mostly it's always F150 at the top of the list. So I'm not sure what your sayigng there. Actually I wish all the yuppies would go back to their Japanese cars and leave the 4x4 trucks and SUVs alone so I can afford them new again... My last brand new truck had a 4 speed roll up windows and no A/C or radio and I was able to pay for it in 2 years... also I wasn't too concerned if it got rubbed against a tree or overloaded it.. Try that with a $65k pick up truck your making $1200.00 payments on. That truck had a 460Ci engine (7.5l) Fords not offering anything near that big anymore.. The biggest gas engine they have for F150 is a 5.4l which makes about the same torque as my 460 did and uses about 30% of the fuel that did.

[bossel]

Guess we won't come to an agreement here Don't forget I am European!

F150 has for years been the top selling vehicle of any kind year after year in north America.

Seems the ecological groups have to do a lot of mind changing over there!

The biggest gas engine they have for F150 is a 5.4l ...

Geee that's unbelievable for Europe. Most cars are <= 2l and a 3l V6 would be for luxury cars. We'd use 5.4l engines probably in buses or small air-planes A new trend is towards turbo charged 1.2 and 1.4 l engines which are even more efficient than a 1.8 or 2l atmospheric engine.