Blog: Dave LeggettOpel/Vauxhall saga runs on

Dave Leggett | 12 October 2009

I think it's fair to say that the Vauxhall Astra UK media launch at the Ellesmere Port plant (where it is made) last week was a tad overshadowed by the continuing uncertainty facing GM's European operations.

This has been a saga running for many months now and the longer it goes on, the more frustrated people inside Opel/Vauxhall, understandably, must become. And I don't blame them.

We're supposed to be a matter of days away from a deal to give Magna a majority stake in Opel/Vauxhall, but it would seem that the behind-the-scenes negotiations over governments' financial support and any 'guarantees' over future employment or volume/model allocations to plants are far from being sorted out. It is also far from clear what the position of the EU will be on state aid and where it has gone or is going.

Has this whole process been political? You bet. Is it messy? Yes, very and on so many different levels.

Buried in the footnotes of the ongoing Opel/Vauxhall industrial saga is the simple fact that GM Europe has come up with another very, very good car in the latest Astra. It has had rave reviews.

There is surely much to value in an organisation that can develop and produce top quality mass-market cars. That, at least, is something very positive for everyone at Opel/Vauxhall to justifiably feel good about.
One way or another it is pretty clear that this company will carry on in business. And it will retain a pretty substantial manufacturing footprint and the critical engineering mass to develop products.

The people at Magna may have concluded that in the long-run there's a lot more to making Opel/Vauxhall work than simply where individual plant capacity utilisation figures and productivity stand right now, or indeed over the next few years.

Future product and volume growth will count for a lot. And big infusions of government money can certainly dull any immediate cost pain if some plants have to be 'carried' for a while. It's a question of balance and where the cost sums come out, as well as the more fuzzy political considerations – which don't sound cut and dried, by any means.
And are there big potential synergies for Magna in running Opel and having a Tier 1 business? You bet.

Will the Magna deal be completed very soon or are there still some twists ahead? Don't rule out more twists. But I think I speak for many when I say I hope the fog of uncertainty over Opel/Vauxhall's ownership lifts soon.

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