47 replies to this topic

[Cooperman]

How on earth can it be anything to do with Brexit? It is an American company selling a loss-making European subsidiary to a more successful European company.

 

Remember, Chrysler was sold to Daimler-Benz, who then sold it to FIAT, all to contain losses and spread development costs by improving group market share..

 

Nissan hold a large share of Renault and have committed to continue to have their European Design Centre at Cranfield.

 

It is part of Globalisation of the auto industry which has been on-going for years and will continue. Peugeot see this as a way of improving the overall strength of their company and GM see it as a way out.

[nicklouse]

Peugeot see this as a way of improving the overall strength of their company and GM see it as a way out.

Yep. And you will see two more UK car manufacturing sites close. And yes Berxit will have caused it.

Don't get me wrong I don't want to see it. But they will not be making cars with a Vauxhall badge on them if they survive.

[Northernpower]

This is a further extract from the commentary.
Why has GM struggled so mightily in Europe? It's mostly about Opel. Opel's costs are very high: It has expensive factories and engineering offices in Germany, where wages are generous and laws make it (very) hard to cut employees. Meanwhile, the Opel brand itself was neglected for years and doesn't have as much pricing power as some rivals. The combination makes for thin profits under the very best of conditions.

Selling Opel would be a big, bold, dramatic move. It would take GM out of the world's third-largest new-car market, at least for now. It might drop GM a notch or two down the list of global automakers by sales, but it shouldn't be a surprise to investors.

A sale of Opel at this moment would be philosophically consistent with other big moves GM has made in recent years, like exiting the Russian market, closing its Australian factory, and pulling the Chevy brand out of Europe.

In all of those cases, GM showed that it's very willing to trade sales volumes for profitability. GM president Dan Ammann explained the company's thinking quite clearly at a conference for investors early in 2016.

We have looked across our business by market, by geography, by market segment and have very carefully scrutinized where is it that we can earn a return in the long-term, and where is it that we don't see a path to an acceptable long-term return.

Where we haven't seen a path to an acceptable long-term return, we have not been afraid to make the tough decisions to exit, or restructure, or adjust our business model to put us on a path where we can make a long-term return. These are just a handful of the significant decisions that this leadership team has made over the last couple of years to really strengthen the core of the business by being disciplined about saying, you know what, we can't see a path to make a long-term return in this place and therefore we are not going to invest

[mini-geek]

The fact they will pull all manufacturing out of the UK is because of brexit

Obviously it's nothing todo with it's supposed losses

There is very little we can do to stop them apart from cutting their costs in the uk I doubt they pay much anyway

I do a lot of work on vauxhalls and like them I just hope they don't get influenced by Peugeot too much as I hate working on French crap lol

[Northernpower]

The fact they will pull all manufacturing out of the UK is because of brexit

Obviously it's nothing todo with it's supposed losses

There is very little we can do to stop them apart from cutting their costs in the uk I doubt they pay much anyway

I do a lot of work on vauxhalls and like them I just hope they don't get influenced by Peugeot too much as I hate working on French crap lol

 

On Brexit I do realise I have a different opinion to some others on this forum and I respect their views because they are born out of their own belief. I tend to base my argument on fact rather than conjecture and raw emotion and I do appreciate its a highly emotive subject with very entrenched attitudes.

 

Brexit is becoming and will continue to be a convenient excuse for all the major conglomerates to reassess their European operation; this happens all the time to help with manipulating funding from governments. I like Vauxhalls and so do a lot of people, its through hard work with the plant management and more importantly the co-operation and understanding of the unions that the two UK plants are the most efficient GM plants in Europe. The losses on the European GM operation are minor compared to the overall GM losses and contrary to other opinions on here they are very real and wholly attributable to the EU operation. GM stated in 2009 they wanted out of Europe and this was not helped by their disastrous dalliance with SAAB. The GM President Dan Ammann reiterated this at the beginning of 2016 before the Brexit vote.

 

The PSA group have a history of protectionism and will want to bolster the French manufacturing facilities above all else and it will be because of this they will look at plant closures and not Brexit. I was heavily involved with the PSA Group in the late 90's early 2000's and I have to say they are single minded in their protectionist approach. They were quite willing to close the UK manufacturing operation and sacrifice UK market share to protect their French manufacturing base. They closed Ryton and watched their UK sales plummet from a once high of 210,000 per annum to a current 98,000 full year 2016 sales. Their plant closure decision in 2007 had nothing to do with Brexit.

 

There are no facts to support the statement manufacturing will pull out of Britain because of Brexit. Its quite the contrary at the moment, because of the fall in the value of sterling, UK production facilities are ramping up their production because its more profitable to produce in Britain. This is not just short termism either because you will be aware looking into the future the most important negotiation we will have will be regarding the Customs Union more than the Brexit negotiations. You will also be aware their are a significant number of multinationals now registering offices in the UK to take advantage of more favourable terms regarding import duties with none EU countries.

 

Now is a very convenient time for all multinationals to inform the UK government they will be pulling out of the UK unless they receive some sort of sweetener. Nissan is typical, they have now said they want an additional £100 million to stay in Sunderland, Ford have asked for more to stay in Wales. If Nissan stay in Sunderland post Brexit they will benefit, they don't just have to sell to the EU. The restrictive EU Customs Union means the import duties imposed by the USA will be lower on UK manufactured cars than they will be on EU, Japanese or Chinese manufactured vehicles. Nissan have said it will be the same production costs whether they are producing cars for the EU of the USA. This is not just applicable to Nissan, it will also benefit, Honda, Toyota, BMW MINI, Bentley, Rolls Royce, Jaguar Land Rover, Aston Martin etc and of course the two current GM plants, unless the PSA Group want to put them to the sword to protect their French operations, (and they're bloody minded enough to do that).

 

With the UK pulling out of the highly restrictive EU Customs Union other multinationals are now registering companies in Britain. Interesting times ahead.

Edited by Northernpower, 05 March 2017 - 02:03 PM.

[Cooperman]

The biggest losses are from the Opel operation with the high salary levels. Are Germany pulling out of the EU then?  I believe Opel have around 19000 employees whist Vauxhall have around 4500.

So perhaps someone can explain exactly why it's about the UK's decision to leave the over-regulated EU which is driving GM to sell its EUROPEAN operations to PSA. Almost 80% of what is being sold is in Germany. It is nothing to do with Brexit at all, but the 'remoaners' will use it as a reason for everything that happens over the next few years because it suits their 'anti-democratic' views. PSA bought Chrysler in the UK some years ago and closed it down. That was nothing to do with the UK's membership of the EU. But some will blame everything on the democratic decision of the British people.

I guess we can blame Brexit for Boeing's decision to enlarge their European operations by increasing their operations in the UK.

[Ivor Badger]

Pity the workers can't do a "TRIUMPH" as in Triumph Motorcycles.

That way the Quality of the product improves to near 100%,so persuading more Brits to buy a "HOME GROWN" product.

 

No, the build quality is bad enough just now. I see a corsa advert where you get 4g or something as standard. Is this to give you something to do while waiting for the recovery truck?

[Ivor Badger]

So GM closing SAAB, that'll be the result of Brexit .

[Northernpower]

So GM closing SAAB, that'll be the result of Brexit .

GM sold SAAB to Spyker in Jan 2010 after admitting they didn't understand the brand. They tried to make it a re bodied GM platform car and as we all know (apart from the GM hierarchy) that was not what SAAB was about.

[KaneH]

Good counterargument there. Well done

No need to. When you are there.

Humour as well. I am impressed

[mab01uk]

Oh and let's not forget Brexit as BMW have announced that they are investigating plans to make the Electrical MINI production in Germany or in the Netherlands. I know that Oxford has a max volume capacity of 280,000 cars and they already build the 3 & 5 door models and clubman so their isn't much spare capacity. Meanwhile Nedcar build the convertible and 3 door along with Countryman models too. From memory they are a much larger plant, as they also build the G wagon for Mercedes. So they have spare capacity and vast experience / facilities to make more MINIs.
Let hope this doesn't spell the end for Oxford too.

 

Back in September (a couple of months after the Brexit referendum) Oxford City Council struck a £4.9m deal with BMW to expand the MINI plant in Cowley.
The car manufacturer, one of Oxford’s biggest employers, wants to expand its production line into playing fields land off Roman Way.
The council agreed the deal that will see the German company make a one-off payment to the council.

http://www.oxfordmai...Cowley/?ref=mac

[mab01uk]

 

Pity the workers can't do a "TRIUMPH" as in Triumph Motorcycles.

That way the Quality of the product improves to near 100%,so persuading more Brits to buy a "HOME GROWN" product.

 

No, the build quality is bad enough just now. I see a corsa advert where you get 4g or something as standard. Is this to give you something to do while waiting for the recovery truck?

 

 

Most private car buyers these day want 'aspirational' brand cars in all sectors such as MINI, Mercedes, Jaguar, BMW, Audi, etc........Vauxhall has remained a dull 'bread and butter' brand that you expect to get as a hire car, company pool car or as a company car buyer with no choice.....however as most company cars are now bought using a personal company car allowance most choose a lower spec 'prestige' brand instead of a Ford or Vauxhall. Ford are fighting back in small cars by pushing the Fiesta up market to compete with the MINI and the Audi A1 but Vauxhall's effort with the Vauxhall Adam 'wannabe' unsuprisingly seemed to flop judging by the few seen on the road in UK.......

Edited by mab01uk, 05 March 2017 - 08:45 PM.

[nicklouse]

Good counterargument there. Well done

No need to. When you are there.

Humour as well. I am impressed

Not much to say. Been working developing cars and parts for GM since 1999.

I know what Brexit has done I know what the VW emissions has done.

And I can have a very good guess ar what will happen in two years of so.

What is interesting is there is no mention of Holden. Is that badge gone or will GM put it on their Chevys.

[CMXCVIII]

I'm astounded at some of the political illiteracy I've read in this thread. It's as bad as anything I've ever seen.

 

Of course General Motors are disposing of their whole European operation for financial reasons and not because of last year's Brexit vote. But Brexit represents the ONLY hope for Vauxhall!

 

PSA, as a European manufacturer, has known for the last 20 plus years that British employment laws are more lax or liberal [according to your viewpoint] than the laws that apply to German and their other mainland European plants.  It's easier to open factories in the UK - and easier and cheaper to close them too.

 

Vauxhall's future in the hands of PSA, rests wholly with the "uncertainty' of Brexit, by which I mean that the political and economic consequences have not yet been determined or confirmed. At the moment, it stands to be an economically good future for the UK and Peugeot will at least delay any UK contraction of their GM purchase, until they can see which way the wind will blow.

 

Jon

[Northernpower]

I'm astounded at some of the political illiteracy I've read in this thread. It's as bad as anything I've ever seen.
 
Of course General Motors are disposing of their whole European operation for financial reasons and not because of last year's Brexit vote. But Brexit represents the ONLY hope for Vauxhall!
 
PSA, as a European manufacturer, has known for the last 20 plus years that British employment laws are more lax or liberal [according to your viewpoint] than the laws that apply to German and their other mainland European plants.  It's easier to open factories in the UK - and easier and cheaper to close them too.
 
Vauxhall's future in the hands of PSA, rests wholly with the "uncertainty' of Brexit, by which I mean that the political and economic consequences have not yet been determined or confirmed. At the moment, it stands to be an economically good future for the UK and Peugeot will at least delay any UK contraction of their GM purchase, until they can see which way the wind will blow.
 
Jon

From what I understand PSA are going to give an assurance tomorrow not to make a decision on the UK plants until 2020. I do take this information under guidance but my source is reasonably confident.