Tough Times For GM's European Operations ... No End In Sight

Now that We the People have "saved" GM in the U.S., how about some more taxpayer money to save their European operations, too?

Of course, the taxpayer money used to save GM wasn't restricted to North American operations. In fact, it appears that much of it will be needed eventually in Europe. Hopefully, that will be enough to do the trick, although GM's losses just keep piling up in Europe with no end in sight. In fact, the situation is deteriorating each year.

So just how bad are things for GM in Europe and, how long will the bad times last?

GM Names New Opel Chief has the updated story, and it's not a happy one:

"General Motors appointed former Volkswagen executive Karl-Thomas Neumann to lead its troubled Adam Opel AG operations on Thursday, the latest in a succession of managers GM has drafted to reverse its mounting losses in Europe. . . .

As Opel chief executive, Mr. Neumann—a well-regarded German auto industry veteran—will take one of the industry's toughest challenges: reversing nearly $15 billion in cumulative losses that GM's European operations have racked up since 1999 amid the deepening gloom in the region's auto market.

Much of Europe's auto industry is hemorrhaging from a chronic glut of factory capacity that is expected to worsen as it faces a sixth straight year of shrinking car sales.

But Opel has suffered more than most. Along with too many plants in Western Europe, its sales are largely shackled to the region and its image has been battered by more than a decade of failed turnaround attempts. GM CEO Dan Akerson has ousted two Opel chiefs in less than two years in frustration with the pace of restructuring.

Mr. Neumann's first job will be ensuring Opel, the heart of GM's European operations, reaches its aim of breaking even by mid-decade—though Europe's declining car market still shows no sign of bottoming out. . . .

 

GM warned in October that it could post losses in Europe of between $1.5 billion and $1.8 billion for 2012, depending on the level of restructuring costs in the fourth quarter. It reports fourth-quarter results on Feb. 14. In 2011, GM lost $747 million in Europe.

In a sign of GM's impatience, Vice Chairman Stephen Girsky said earlier this month that he is weighing closing Opel's Bochum, Germany, plant by 2015, nearly two years earlier than planned, unless Opel bosses and unions can wring out more costs. . . .

"All of the bad news and upheavals over the past year have certainly hurt the brand in the eyes of the customers," said Thomas Bieling, chairman of Opel and Chevrolet's German dealer association. . . .

Mr. Neumann's predecessor, GM engineering veteran Karl-Friedrich Stracke, replaced Opel Chief Nick Reilly in April 2011, only to be ousted 15 months later."

Summing Up

I wonder how many of our fellow long suffering U.S. taxpayers have any idea just how much of our GM bailout supplied money has been, is being, and will go on for at least several more years being lost in GM's European operations.

But I don't wonder at all about one thing. The U.S. aristocratic government knows best gang won't be making sure that we taxpayers are properly informed about the continuing impact of any of this 'global bailout money' on "We the People's GM investment."

As far as the re-elected politiicans are concerned, the happy story of GM's salvation ended when last November's U. S. elections were concluded. Besides, their partners in the UAW leadership are unaffected by the billions of dollars in losses in Europe.  Mission accomplished.

As for us taxpayers, our role remains to be seen and not heard, and to continue to fork over the money to subsidize the politicians and their staunch political allies and partners ---- the unions, both private and public sector alike.

That's my take. And to my fellow taxpayers, I say this. It's our money, or at least it once was.

Thanks. Bob.