GM Europe’s new president scored a major win, as General Motors took its Russian operations and put them back under its European wing – another move to aid the division that had huge job cuts in the desperate quest for profitability.
GM decided that bringing back into the light its European business is a top priority – even as the unit has totaled $18 billion in losses over the past 12 years, with the US automaker now churning in billions more in spite of the likes of Morgan Stanley that advise to sell Opel and its UK sister Vauxhall.
“This will allow GM Europe to emerge more quickly from the red,” said Ferdinand Dudenhoeffer, head of the CAR automotive research institute at the University of Duisburg-Essen.
From January, General Motors International Operations (GMIO), based in Shanghai, China, will move the Russian arm back to GM Europe (GME) after it controlled it for three years. Besides Opel’s own sales in Russia, GME will get to consolidate under its arm also those of Chevrolet, which outguns it two to one in Russia, while also counting on GM’s premium unit, Cadillac.
This move could signal that Opel’s new chief executive and GME president Karl-Thomas Neumann, who was brought in March from Volkswagen, managed to win a behind the curtains fight for influence within General Motors.