100 Days of New GM: International Operations

[JoeT]

New GM 100 Days: International Operations

David Bottin
JoeT
News Editor
GMInsidenews



General Motors once boasted the “Standard of The World” amongst their ranks.

Decades of manufacturing dominance stood as a statement that America was the shining light of progress. Whilst it was the style that caught a car lover’s eye, the sheer scale of production and rapid growth in manufacturing expertise, were what gave General Motors the keys to much of the automotive world. Now with a presence in all corners of the globe, every worker, white collar employee, dealer and salesman, collectively held their breath as the once unstoppable giant came to a grinding halt.

It has been 100 days of torture for the foreign assets and resources of General Motors. So far from the maelstrom on American shores, but still all too vulnerable, who stood on their own merits, who has fallen and who is going to rise in the future?


Establishing A Centre for Operations

It would seem that as unrest took hold in the US, GM’s relationship with China has strengthened. Any doubt of the significance of China in the future of GM’s global efforts was wiped out in July, with the announcement of General Motors International Operations Team based in Shanghai. Acting not only as statement of China's importance, the announcement of David N. (Nick) Reilly as Executive Vice President also served as a statement of intent that Detroit has in store for international operations.

Over his 35 year GM career, Nick has had exposure in proportion to the breadth of his new responsibilities. Most recently, he oversaw the delivery of GMDATs latest generation of vehicles as the founding President and Chief Executive officer in October 2002, moving on to GM Group Executive Vice President and President of GM Asia Pacific in 2006. Unlike many GM execs, he has remained in Asia for an extended period, accumulating a well choreographed exposure and progression through GMs key regional infrastructure. That is all in addition to serving as a deputy chairman of the Seoul International Business Advisory Council (SIBAC) and a member of the U.S. APEC Business Advisory Council.

In short, he not only knows how to up-skill a work force and manufacturing facilities, he has also been privvy to the successful process currently being employed in the building of General Motors latest and most dynamic region.

Shanghai GM

Regulating an Empire

Further abroad, in smaller markets, GM has released few key new products as their home market draws predominant focus and funds to the disentanglement of the Union/Dealer/Manufacturer/Corporate relationships. South America has presented the much anticipated Chevrolet Agile. Designed in Brazil specifically for the South American market, the small hatchback is sure to have strong local appeal to complement the large number of older designs currently available in the GM South American stable. It is this type of design that was originally bought in for criticism when interweb Google professors and industry professionals alike, started pointing fingers and assigning blame as soon as there was any hint that GM was headed for bankruptcy court. That is, designs that are specifically designed for their home market, with little appeal off shore, just shouldn't be. It is here where one may start raising questions about remote design centers so far from home.

It would seem that Detroit bean counters, under immense pressure, have shared this sentiment but rather than putting the parental foot down, has withdrawn or significantly decreased investment out side North American Shores, in accordance with conditions placed on their US tax-payer funded lifeline. These types of products can still survive, if they can punch their own ticket, which is the way it should always have been. This criteria will be aided by GM's stated intent, to put those closest to the customer, closer to the product decisions.

Chevrolet Agile (South America)

That isn't to say that they will be left to their own devices however. The first truly Global product (if you don't include the internationally acclaimed VE/WM product range, which is available on every continent except North America and Antarctica ) to spread its international wings with such diversity, is the Cruze. Soon to be [or in most cases already] available in Europe, India, Africa, Australia, China, and North America, the big small car has already been introduced to most of the world. GMI drove the Turbo Diesel Cruze and all the things that matter, seem to be hitting their mark. Whilst some have reviewed the petrol power plants as being underwhelming, it hasn't hurt sales and no matter what is uttered in forums and magazines, the final, most important opinion of all is the customer.



GM China

Michael McWilliams
mikmak
Australia Correspondent
GMInsidenews



Of all the far flung reaches of the General Motors universe, one entity has established itself as the shining light on distant shores.

Exactly 1 month after General Motors filed for bankruptcy protection, GM China posted a first half sales record, and that success has continued with subsequent monthly sales results breaking even more records, including the fastest sale of 1 million vehicles in China. That vehicle? A silver Buick Lacrosse. GM has established partnerships with a broad range of key local players, laying strong foundations in a market that is defying the economic “doom and gloom” that currently encompasses the rest of the world.

Think Global, Act Local

If you want to do business in China, you can't go wandering the halls on your own. China is well aware of where it sits in the world with respect to current and potential growth and if you want a piece of it, you had better be prepared to make nice, by asking to chaperone one of the locals. In 1997, General Motors China entered into a 50-50 joint venture with SAIC (Shanghai Automotive Industry Corp.). Representing the network of facilities that build, sell and support Buick, Cadillac, Chevrolet and Saab products throughout China, Shanghai GM has served as the portal for General Motors access to a rapidly maturing market. As such, GM has wasted little time in presenting China with some of the best products in the General Motors Global repertoire, and at times, products not available anywhere else in the world. From a full range of Cadillac products, to the Buick Park Avenue and new Buick Regal, China has it.

To check out our earlier assessment of Buick in China, read our article on their template for Global success.

Buick Park Avenue

GM China and SAIC also joined with Wuling in 2002, to form the SAIC-GM-Wuling Automobile Company which has bought with it, a range of Minivans and trucks, as well as manufacturing facilities for the Chevrolet Spark. An additional benefit of having Wuling on the team, is their seemingly indefensible market volume. The diminutive Sunshine Minivan and its luxury and commercial cousins represent over a third of GMs unit sales in China. Right now it is all coming up roses, with month after month of record sales, shining a light on the partnership, but it isn't going to last forever. As with many other markets, China is taking steps to improve its perception with respect to transport sector emissions by applying heavy fuel consumption and emission standards. Despite the Sunshine being about the size of a broom closet, its old tech power plant does not meet the impending CO2 standards. There are a suite of favorable engine capacity related tax exemptions and subsidies, but there is a real need for SAIC-GM-Wuling Automobile Company to improve emissions if they are to retain their position in the market.

Wuling is also developing its own sedan, leveraging the expertise from P.A.T.A.C., to provide a more accessible motor vehicle below the Chevrolet Cruze. The as yet unnamed (though rather handsome) mini car will contend this already crowded segment with a 1.2L engine and rock bottom pricing.[1]

Grade:A for partnering with key product players and providing China with the best vehicles GM has to offer.

Wuling Sedan


GM-SAIC-Wuling Sunshine

Give and Take

Right now, Kevin Wale resides as the President and Director of GM China Group and has been part of major successes in the last 100 days, including the signing of a recent agreement that involves the importation, from the US to China, of $607million USD worth of vehicles, machinery and equipment from GM in North America. Once again, General Motors acted as part of a team, this time as Shanghai GM (the 50-50 partnership with SAIC).

More recently, the GM-SAIC-Wuling JV has begun to bare more fruit with an announcement of the exporting of Wuling commercial and passenger minivans to the Middle East, South America and North Africa. Not only will these products come from Wuling plants, but they will also wear the Chevy bow tie, spreading brand recognition further than ever before.

Chevrolet N200 Commercial Van

It isn’t just vehicles that General Motors is bringing across the Pacific either. Identifying the potential of the Chinese market and the growing desire for tech functionality, OnStar made the trip as well, partnering with China Telecom to become the first market outside of the North American region, to receive access to its range of capabilities.

Beyond the more pronounced face of automotive business, General Motors has also opened a host of technology and management centers, as well as assigning key design responsibilities to reinforce their presence and confidence in the domestic market. Aside from the International Operations Head Quarters, Alan Taub, GM’s new Vice President of Global Research and Development announced the opening of GM China's Science Lab (also in Shanghai):

Originally Posted by GM Media

“Our aim is to develop breakthrough technologies that will differentiate GM vehicles in the marketplace and build on GM’s long history of industry firsts. The China Science Lab’s opening demonstrates that GM is moving aggressively to maintain leadership in breakthrough technological research globally.”

This is in addition with P.A.T.A.C. (Pan Asia Technical Automotive Centre), which is has been responsible for specifying GMs global products for local sale, will secure a strong future in China, and, provide a central hub for product development testing.

Grade: A for playing well with others, aiding the advancement of the Chinese domestic Automotive Technology Landscape and contribution to mutually beneficial export programs.

Pan Asia Technical Automotive Centre

The double edged sword

We've done our best to cover the most significant of operations in China within the last 100 days, but this is really just the tip of the iceberg. There are a number of other joint ventures including FAW which will present a number of additional light duty commercial vehicles as well as the shared stake in Shanghai GM (Shenyang) Norsom Motors Co. Ltd (manufacturers of Chevrolet Cruze), with SAIC and countless financing and manufacturing interests. The main concern is that SAIC is also a joint venture with Volkswagen, who's partnership has spanned 25 years. Volkswagen is the main competitor in China and recently celebrated their 5 millionth car (Skoda Superb)[2].

There is no doubt that as the larger global companies move to establish their own piece of the ever expanding Chinese market, they are providing domestic players with the key ingredients to significantly upgrade their own quality, technology and competitive edge. That may sound scary to countries that have been used to sitting at the top of the product pile, but what it means for China is that they have effectively leveraged their economic position to justify foreign investment.

We are sure that General Motors is exercising considerable caution with respect to disclosure of technologies and dispensing IP rights to their partners. In the near future, there is going to be plenty of competition from not just direct opposition, but also GM generated platforms. For example, the Saab 9-5 will be competing directly with the Buick Lacrosse. Likewise, SAIC has developed the Roewe/MG line and will position itself against the likes of the Buick Regal. There is a lot of gray area to contend with, and all parties are going to have to tread carefully so as not to damage the relationships that have been so carefully encouraged and developed. The upside is, with feet in both camps, SAIC cannot hurt one without hurting itself.

However, their visibility in a range of other activities like their involvement in the China World Expo 2010, are helping to raise their profile and set them up as not just a foreign marque, but a contributing corporate citizen. This is an important ingredient for longevity, as ill will toward GM will generate negative public sentiment if they are already held in high regard.

Their public profile, establishment of International operations and the continuing provision of a world class lineup, serve as a strong demonstration of how General Motors needs to address its global future. Not as an all consuming wrecking ball, that buys up everything that moves, but rather through local collaboration. It is this tactic that will reap greater benefits for GM China as Chinese exports increase, ideally allowing them their own significant slice of the pie.

Overall GM China grade: A for recognising the role and benefit of co-operation, and acting on it.

Cadillac SLS

Credits:
1 China Car Times
2 China Car Times



GM Australasia

Michael McWilliams
mikmak
Australia Correspondent
GMInsidenews

Another rising star, though currently handicapped by sins passed, is the volume lite, talent heavy goal kickers from Holden and GMDAT (General Motors Daewoo Auto & Technology).

Since 2006, Holden has been providing much of the planet with critically acclaimed, accessible rear wheel drive goodness. Their niche appeal has evoked passion and grins across the faces of auto enthusiasts across the globe, but the smiles in their home market have been more reserved since the axing of a considerable portion of their export volume. Daewoo on the other hand, have given life to General Motors hopes for the global dissemination of the bow tie, through products such as the Cruze, Captiva and Antara. Both were bitten hard by the crisis 100 days ago and one of them is still hurting.

A defiant lions roar

Mark Reuss, at the time Managing Director of Holden, took significant action early, applying restructuring to reduce the Lions reliance on export sales and securing a broader product range for manufacture in Adelaide, South Australia. Taking advantage of the Australian governments desire to see local manufacture of lower emission vehicles, Holden announced that the Cruze will be built locally from 2010. Additional business was found in export and manufacturing deals for the Direct Injection HFV6 in Port Melbourne as well as the 2.8 turbo V6 destined for the Cadillac SRX.

The SIDI (Spark Ignition Direct Injection) V6 is now standard in the Commodore lineup (3.0 for Omega and Berlina Models and 3.6 for SV6, Calais, Statesman and Caprice) with a six speed automatic transmission (6L50). Likewise, the 3.6 SIDI engine is also utilised in export products such as the Daewoo Veritas and Buick Park Avenue for China. Together with the preceding plant redesign which saw Holden become one of the most high tech and flexible plants in GM.

The local manufacture in 2010 of the Holden Cruze, will be a significant test of General Motors new "Flex Plant" concept. This is where any facility across the globe can manufacture any GM product. As long as there is a right hand drive variant, all they will need is the tooling.

The fingers are now tightly crossed, that Holden's recent submission for the US law enforcement market (Caprice PPV) will further supplement Holden's viability. If anything, one of Holden's biggest problems at home, is the view that they are a one trick pony, which is rather ironic since they build more variants of one platform in Adelaide, for more markets than just about any other automaker.

The inclusion of the Cruze is crucial for winning over public opinion and demonstrating the true capacity of General Motors next generation of manufacturing capability. To help along public opinion Holden has also expanded its Ecoline range to highlight technologies aimed at reducing emissions. This includes LPG, SIDI, Diesel (for the Cruze) and will also likely include E85 capability next year.

Grade: A for swift decisive action and strong focus on public perception and future product.

Chevrolet Caprice PPV

Wounded Tiger

Since being bought out by General Motors in 2002, GMDAT has been turning out some impressive vehicles, but it has come at a cost. A large portion of investment has come from Korea Development Bank, in the form of a $2 billion dollars. This line of credit ran out at the start of this year and GM is currently trying to find money to re-invest in their fledgling small car stalwart. Regardless of GMDAT's crucial role in the future of General Motors small car operations, once again Detroit cannot provide any of its 50 billion dollar life line to non-US operations. Instead it is up to GM International Operations to try to find additional funding, though already, many of the International Operations have already had to seriously tighten their own belts to apply any type of certainty to their own viability.

Despite their significant increase in product quality and depth, GMDAT are still in serious trouble with their most likely savior to be KDB (again).

Grade: B for contribution to global expansion, but need to seriously address their financial future!

Daewoo Matiz Creative and Winstorm

These two relative minnows in the General Motors equation, both provide significant pieces of the larger picture. Neither produce the most expensive products, nor are they weighed down by overt in your face tech, but the niche attraction of Holden and significance of GMDATs potential cannot be overstated. One holds enthusiast appeal in spades, whilst the other provides an avenue to compete against mass produced global competition with the edge on cost. Both have to survive if the New GM is going to hold bespoke advantage over their global competition.

Overall Grade: B

Credits:
3 Rueters



GM Europe

Bravada
European Correspondent
GMInsidenews



GM's European arm saw perhaps the most dramatic changes since the beginning of "new GM", and is also the one raising the most questions concerning the future, as many issues are left pending and open.

In short, after 100 days after emerging from bankruptcy:

• GM is in the process of closing the sale of most of its European assets in the form of Opel/Vauxhall brands, manufacturing and engineering/design capacity to a consortium of Magna International and Sberbank; at the moment I write this, the outcome thereof is not certain due to the involvement of EU authorities
  
• GM has sold its Swedish subsidiary Saab Automobile AB to a group of investors led by Swedish supersportscar maker Koenigsegg Automotive AB and including the Chinese manufacturer Beijing Automotive Industry Holding Company (BAIC)
  
• Following years of minimal sales and the bankruptcy of the European distirbutor, Kroymans International, GM has announced scaling back of Cadillac-Corvette-Hummer distribution in Europe, as well as the cancellation of the slow-selling compact Cadillac BLS built by Saab

What actually is GM Europe and why is it important?

GM Europe could be seen in three perspectives - as a sales region for the global GM and thus one of the most important markets, as a collection of manufacturing plants and as a design and development centre.

Europe is an important market for GM - almost 1/4th of GM sales in 2008 came from GM Europe, but even that doesn't truly reflect the region's scale and importance in the global market. In fact, the markets covered by GM Europe, make up the largest region by sales volume in the automotive world, with almost exactly 1/3rd share, which is more than Asia-Pacific combined.



A vast majority of the vehicles GM sells in Europe are manufactured there. GM's production capacity after divesting Saab, not counting powertrain, transmission and other component manufacturing, comprises of seven final assembly Opel plants and the all-new Russian plant in St. Petersburg serving the local market. Moreover, GM has contracted out manufacturing to several partners in Eastern Europe - the FSO supplies all EU-market Chevrolet Aveos, while three partners in the CIS assemble unique local models for local consumption. Last but not least, there is the GMM Luton facility in the UK, which builds mid-sized commercial vans for both Opel, Vauxhall and Renault. Renault reciprocates by building Opel vans in their factories, and several small-volume models such as the Tigra and Agila are also contracted out, but this will not be discussed in detail not to blur the view.



Finally, GM Europe has always been a very important part of the global GM engineering, design and development network. GM Europe has been the driving force behind both the previous and the current Epsilon platform, as well as crucial for the development of the new Delta, two very important platforms crucial to New GM's sales and success in both North America and Asia.

Two Opel cars, the Insignia and Astra, are now being adopted worldwide as Buicks, for sale in China and North America, both markets remaining key to GM regardless of the faith of Opel itself.


The Opel saga

As has been widely publicized, after much wrangling, GM's Board agreed to sell a 65% stake in Opel to a consortium formed by the automotive supplier and contractor Magna and Russian state-controlled Sberbank. While this move got the blessing of the German government, GM made the choice with mixed feelings at best, with concerns about intellectual property rights and the future of GM's global development, heavily dependent on Opel, as well as future intra-competitiveness of Opel's and "core GM's" offerings. As noted in the management section, GMI believes that the management and the board have done a lot to improve GM's position in the negotiations, even though the conclusion has been seen as foregone from the outset.

The transaction was highly political in that it involved the German government acting as both a broker and seller despite no direct state shareholding in Opel both prior to and after the transaction. While the German government's involvement was motivated mainly by the desire to prevent a bankruptcy resulting in severe job cuts in Germany, other countries sporting Opel/Vauxhall facilities raised concerns about favoring German plants over their own and possible breaking of EU state-aid rules which forbid such practices. At the moment of writing, the issue of whether countries such as Belgium and the UK will manage to stop the transaction via the European Commission is still open.


Tackling the overcapacity



Much like GM in North America, GM Europe has been wrestling with overcapacity in their Western European plants for some time. Despite repeated downsizing, Opel still has enough capacity to build far more than it can sell, and most of it is in high-cost countries such as Germany, Belgium or the UK. The costs of running those plants, coupled with less-than-stellar performance until recently, have put GM Europe on the verge of bankruptcy themselves when the recent crisis set on.

This is also the reason for so active an involvement of the German government in the Opel cause - three of the factories are in Germany, where labour unions are strong due to the unique German law, and with the high German labour cost, there were on the line for closure. Unfortunately for them, the models built in Bochum (Astra, Zafira) and Eisenach (Corsa) could be built by other GM plants in lower-cost countries. The remaining "home" plant in Ruesselsheim has been battling capacity underutilization ever since Opel's executive car, the Omega, has been phased out, and more recently, it was dealt a blow when the Saab 9-5 assembly was assigned to Trollhattan while the plans the export Opel Insignia as Buick Regal effectively fizzled.

By aligning themselves with the German government, Magna sets itself an uneasy task in restructuring Opel towards long-term profitability, as keeping the German workforce relatively intact will limit their options for cutting costs. This in turn endangers the future of the Antwerp, Belgium and Ellesmere Port, UK, plants, both of which could see their current assignments given to either Bochum or the modern Gliwice plant in Poland, where labour costs are low and quality record has been stellar. And since production can also move out of a low-cost country if a higher-cost country agrees to subsidize such a move, this has been keeping the Spanish and Polish governments on their toes too.


Stayin' alive



It has to be noted that Opel, even if not going through bankruptcy itself, has had a rather difficult situation to cope with in recent months. Rumors of GM going bankrupt have been rampant in the media, and Opel itself has been a likely candidate for bankruptcy. Through all that, Opel has maintained great sales performance, performed two crucial product launches (Insignia and Astra) and did not delay any global development programme crucial to the New GM.

The Opel Insignia has been launched garnering not only positive reviews, but also strong sales in a competitive market. This momentum is now being strenghtened by the arrival of the new Astra, which stands out positively in its class perhaps even more. For the first time it looks like Opel has convincingly outclassed its archrival Volkswagen with the ever-popular Golf, the "gold standard" in its class.

Moreover, Opel's product pipeline is far from empty - following the debut of the Astra 5-door hatchback, we can now expect an all-important Caravan wagon and a coupe-like 3-door to follow, complemented by a new rendition of the Astra-based Zafira compact MPV no later than 2011. Opel's smaller mini-MPV, the Meriva, is also getting the love it deserves in the form of a complete redesign, with striking suicide doors and overall design that will make it stand out positively in a gimmick-filled class. Together, the nameplates who had been newly launched or are slated for redesigned have made up over 50% of Opel's sales in 2008.



Still, there are causes for concern too. Opel's another volume driver, the Corsa, is now three years old and now longer that fresh. The competition is heating up in Europe's most popular supermini class, with new models such as the Ford Fiesta or Volkswagen Polo upping the ante markedly in almost all categories and older competitors receiving comprehensive updates. With Corsa beginning to come at the end of the table in comparisons, the question whether Opel will be able to afford a prompt mid-cycle revamp is becoming pressing.

On the range's fringe, the Opel Combo, which competes against other small delivery vans doubling as "leisure activity vehicles", is by now largely obsolete. The Korean-built Opel Antara SUV has not been a sales success and has now became oprhaned by GM in North America as its sister car, Saturn VUE, has been killed. Both vehicles represent Opel in segments stealing sales from other, more traditional classes, where Opel's traditional strenghts lie.


Chevrolet comes into spotlight, but doesn't shine

GM's global brand has thus become of even more importance to GM in Europe. For the moment, it remains an outlet for the Korean GM DAT products and at the moment shares little with its American counterpart. It remains behind fellow Korean automakers Hyundai and Kia in market share and face challenges against those rapdily expading competitors and more established automakers in both EU and Eastern Europe. The Cruze sedan launched to mostly positive, if a bit lukewarm, reviews, but its popularity at the moment is limited by the lack of hatchback and wagon variants.



The Chevrolet brand is being outsold sevenfold by Opel in the EU, and with Hyundai and Kia fighting long and unrelentlessly for every snippet of market share, it seems Chevy cannot count on a rapid improvement in that region. Most of its volume is generated in the CIS states, where one-third of its sales are generated by locally-manufactured models destined for those markets.


Opel deal puts Chevrolet's future in question too

The Opel deal, while theoretically having little to do with Chevrolet, can also affect the brand twofold:

• In the EU, the vast majority of Chevrolets are sold via Opel dealers who have acquired the new franchise when GM took over and rebranded the former Daewoo. If the sale of Opel results in any rifts between GM and the new majority shareholders, GM might also lose control of that sales channel.
• The involvement of Sberbank in the Opel deal is assumed to be motivated by the Russian automobile industry's zest for modern technology. Magna has been in standing relationships with both leading Russian automakers, GAZ and VAZ. This might mean GM will have to face competition in the CIS countries from their own technology.

GM leading in CIS, but for how long

While GM's market leadership in China has long been garnering publicity, their equally admirable competitive position in the CIS states has eluded such widespread praise. In fact, however, GM is either number one or number two in most of the former Soviet countries, a position the owe to the GM DAT models and the cooperation with local automakers. However recent events have put this leadership into jeopardy.

In Russia, GM has relied mainly on the partnership with the local market leader, VAZ, known internationally for the Lada cars. However, this joint venture saw mixed results, with the new version of Lada's Niva off-roader becoming very popular, but the Astra-Classic-based Chevrolet Viva has seen minimal sales and had been cancelled not long after introduction. VAZ, apart from talking to Magna, is now turning towards Renault and their Dacia brand for their low-cost sedan technology, and rumors are rampant that the JV will not survive long.

GM's sales also depend on the Chevrolet Lanos, an old Daewoo model built by the AvtoZAZ company in the Ukraine and sold both there and in Russia, thanks to a free-trade agreement. While GM's relationships with AvtoZAZ are cordial, to the point of GM contracting out Aveo production for the EU to AvtoZAZ's FSO plant in Poland, the Ukraine-Russian relationships are not so, which makes the Chevrolet Lanos a double eyesore in the eye of Russian industry controllers. The glimmers of hope come from the expanding popularity of "core" GM DAT models and the newly-launched St. Petersburg assembly facility.


Goodbye Dame Edna

In a much more clear-cut situation, GM has divested the Swedish premium automaker to a group of Scandinavian and other investors, headlined by the prestigious Swedish supersportscar maker Koenigsegg, but financially dependent on the second-league Chinese automaker BAIC.



While changing hands, Saab has just launched its long-awaited new 9-5 sedan, based on GM's Epsilon II architecture and shared with the Opel Insignia and Buick LaCrosse. Together with the recently-revised Epsilon I-based Saab 9-3 and the upcoming Theta-based Saab 9-4X, Saab will have one of the freshest lineups in years. With the old 9-5 line, and possible the last non-GM Saab engine, being directly sold to BAIC, the new Saab is now using 100% GM's technology in both platforms and powertrains. Whether this will continue to be the case, and Saab will continue to make vital contributions to GM's global development remains to be seen.


Cadillac, Corvette, Hummer

Sharing the distribution channel and model, GM's "American" brands (as opposed to Chevrolet, not marketed as such per the above) have not broken through in any meaningful way in the past few years, and thus GM had little choice but to declare defeat. Hummer has been sold, and its exact future in the European market remains unknown, although the new Chinese owners have made it clear they want to keep Hummer global and perhaps even expand the brand.



Cadillac, which was to have a European renaissance spearheaded by the Saab-built BLS, has had its distribution limited and the BLS got cancelled after extremely poor market performance. The Corvette fares moderately well for an exotic car, but it only serves to complement the rather measly volumes afforded by its counterpart brands.


Overall

While GM's moves to divest Opel (and to some extent Saab) are more of a sad necessity than shedding excess fat, the future does not look the bleak. However the Opel debacle is going to end, GM has expended effort to retain most of the benefits of keeping Opel in its global stable. Saab is probably better off on its own, and will continue to generate benefits for GM, perhaps even with a more clear-cut black bottom line now.

Chevrolet is poised for growth, but it still remains to be seen whether GM will be able to at least catch up with Hyundai and Kia. The debut of the new Aveo couldn't come soon enough, and Cruze's performance hangs upon the eventual development of a hatchback version by GM Holden. Also, CIS sales' future remains shaky with quite many threats and an undefined plan for further action.

Overall, it's hard to judge GM Europe not knowing to what extent Opel is still a part of it, but assuming it has been 100% GM over the last 100 days, GM Europe deserves a solid B for their successful effort to keep the show going on in view of so many adverse conditions. I am tempted to make it an A-, but the fact that GM Europe gets dismantled to some extent in the process of GM's rebirth is unfortunately little to rave about.



International Operations: The Final Assessment

GM International Operations is a mixed bag. In Europe there is still much confusion of whom will produce what and sell it where. Even ownership of significant operations is yet to be defined and General Motors attempts to align products on common global platform has now backfired. Separation of Opel from GM has become as complicated as a conjoined twin-etcomy, and in China, a similar conundrum exists between Saab and Buick.

Other hurdles include keeping control of domestic specialist products such as the aforementioned Chevrolet Agile, which may meet the needs of the local market, however, those needs could have been met by any number of other global products. Now and in the very near future, General Motors will have in the small car International arsenal, Chevrolet Sail, Agile, Aveo from GMDAT, continually updated older Astras and Corsas, as well as Wulings pint sized hero. Granted some of these are special cases, providing a particular quality to a particular market, but some are not manufactured in line with General Motors new flex capability, meaning that each dollar spent keeping them fresh (as appropriate per market) is held in its own market, rather than contributing to a greater global product. That is also beside the fact that it can only be built in its home market, ensuring that engineering dollars will also have minimal international application.

With GM International Operations in China now controlling greater volumes and a larger number of products than Detroit, their task is nothing less than epic. The key is, however, that they are marching in company with China. They are right there in the thick of it and can see what's coming and from whom.

Overall Score: Despite all the turmoil and confusion, GM International Operations has steadied the ship as much as possible. GM China is better than solid, GM Australasia has good unique product and strong potential (if they can get across the financial hump) and GM Europe is unfortunately dragging its feet due to uncertainty. In normal circumstances, this would rate a C, but in this climate, GM International Operations gets a hard earned B. Let's hope they can hang tough and bring in straight A's next semester.

[MyOldMansMonaro]

Great in-depth article guys! The GMI team certainly seem to have been busy of late.
I guess it's only GM NA's desire to make Chev a global brand which will see greater emphasis placed on Chev in Europe, and I can't really understand how suddenly Opel is seen as if they were a competitor. Surely Opel has much better brand equity and better product right now, whereas Chev Europe will take years to reach the same position. I'm not sure what the latest is on Opel, but am I right that GM will still own the largest stake in Opel if / when the sale finally goes through? Besides, GM only owns 50% of their various joint ventures in China which are held as such great prospects, and yet will still own 45% of Opel which is almost considered a dead loss. Admittedly Opel has it's problems and I'm not sure how much GM's Chinese partners throw their weight around, but I still think Opel is, or at least should be, a key part of new GM.
Interesting that GM International is based in China, but then that's where the growth is, and they certainly seem to be on the right track.

[Bravada]

45% of Opel

35%, if I haven't missed anything. If the Magna and Sberbank have a common plan, they can totally forget GM with their 65%. And the German government has clearly declared who will they support.

GM only owns 50% of their various joint ventures in China

Even less in case of Wuling, but the plan for their JV partners is profit from the peaceful cooperation with GM, which guarantees long-term stability. In case of Magna and Sberbank, both sides (investors and GM) have long-term ambitions and they might not necessairly be compatible.

Interesting that GM International is based in China

It is interesting that there is a "GM International" at all. GM IS international.

[Chaz_23]

Nothing on GM Latin America? They tend to do pretty well over there.

[Deco28]

Hey does GM still have a minority stake in Saab. It would be sad if they didn't =[.

[mgescuro]

Until we see a "1 World, 1 Car" type of attitude from GM, their global strategy is nothing but a lot of hot air.
There is still too much "Well, I don't know if this car would sell there" type of feet dragging. And there is still way too much, "Well, this car doesn't have the right look, so lets change a few things for this market."

1 world. 1 car.
Aside from basic localization changes (license plate holders, bumpers, suspension tweaks, engine, emissions), no other changes should ever be made to a car. Changing a foglight design to suit localized tastes in not a reason.

If anything, GM International is at least a B-, if you want to look the other way on a couple things. Otherwise, a C+ is fair.

[stormwatcher]

Wow. Great in depth article.

[mikmak]

Originally Posted by mgescuro

Until we see a "1 World, 1 Car" type of attitude from GM, their global strategy is nothing but a lot of hot air.
There is still too much "Well, I don't know if this car would sell there" type of feet dragging. And there is still way too much, "Well, this car doesn't have the right look, so lets change a few things for this market."

1 world. 1 car.
Aside from basic localization changes (license plate holders, bumpers, suspension tweaks, engine, emissions), no other changes should ever be made to a car. Changing a foglight design to suit localized tastes in not a reason.

If anything, GM International is at least a B-, if you want to look the other way on a couple things. Otherwise, a C+ is fair.

We tried not to get overly bogged in the + and - grades, but I think your assessment is fair. There is still a lot of bugs to be ironed out with the 1 car one world idea but I don't think you can build one car for every market without it suffering a serious case of the blahs. Volkswagen probably come closest with the Golf, but it doesn't really represent a universal level of accessibility.

Originally Posted by Chaz_23

Nothing on GM Latin America? They tend to do pretty well over there.

That is true but their impact on International operations on a whole wasn't big enough (and we don't know enough about it) to make the cut. There are plenty of areas that haven't been significantly addressed, such as Africa and India. There is still too much to sort out for a clear picture (probably by the end of the year) and GMI is looking to cover these additional markets...eventually! We are but men! (well, except for Bravada)

[jbernie]

Originally Posted by mikmak

We are but men! (well, except for Bravada)

Bravada stole the show... I won't remember a thing that was written thanks to that photo.

[mikmak]

I haven't read a single word anywhere near Dame edna either. I have to scroll down to stop crying.

[MyOldMansMonaro]

Originally Posted by Bravada

35%, if I haven't missed anything.

Ah, thanks for clearing that up. I missed the 10% owned by Opel employees.

Originally Posted by Bravada

Even less in case of Wuling, but the plan for their JV partners is profit from the peaceful cooperation with GM, which guarantees long-term stability. In case of Magna and Sberbank, both sides (investors and GM) have long-term ambitions and they might not necessairly be compatible.

This is true, and I guess we can only wait and see what Magna's long term plans are. Though all this could be academic with the latest news that the EU might block the sale; a leaner GM-owned Opel would be the better option, at least for GM.

Originally Posted by Bravada

It is interesting that there is a "GM International" at all. GM IS international.

I'm not sure there would be any hope for GM right now if it had all been controlled from Detroit! But I agree that GM International should be based in China given the importance of the Chinese market is only going to increase.

[stevecmh]

nice article.. i hope the next 100 days.. are just as big

[Bravada]

Though all this could be academic with the latest news that the EU might block the sale; a leaner GM-owned Opel would be the better option, at least for GM.

For Opel too - prolonging its unsustainable state with state subsidies just hurts it and the German and European economies, as well as the sector, in the long run. One day Merkel's successor would find the coffers empty and cut down the subsidies and Magna and the Russians will be all too happy to close down Western European factories anyway.

If you run efficient operations, you just don't have to close down. Even despite recent job cuts, the Japanese automakers maintain numerous plants in Western Europe, with Nissan building up to six model in the UK, and Honda recently moving Jazz's assembly to the UK, and Toyota continues to churn out Yarii in France.