Why General Motors Left Europe

In 2017, General Motors, the largest U.S. automaker, with brands like Chevrolet, Cadillac, and Buick made one of its boldest moves in its history. It sold its European Opel and Vauxhall brand to the French automaker PSA, known for brands such as Peugeot and Citroen. It was the end of an era for GM, which had first ventured into Europe nearly 90 years before.

GM left Europe after 20 years of losses, but why did the largest U.S. automaker leave such a big market? Did it simply fail?

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC
#GM
#GeneralMotors

Why General Motors Left Europe

[sergiusta]

Toyota and Mazda aren't europeans and they have great succes, because they are building really good cars.

[Dampachi]

It's because GM (and by extension, other US automakers) doesn't understand the needs of the rest of the world. This is the same case in Japan. Quality and brand perception aside, US automakers can't seem to understand why their huge cars/SUV/trucks are not desired in countries where two-way roads are as wide as single lanes in the US. They are basically out of touch.

[LtKharn]

5:20 The big three German manufacturers dominate the EU market? No wonder Americans can't sale cars in the EU, even the expert doesn't seem to be aware the top 3 are VW group, PSA and RENAULT. Not VW, BMW and Mercedes.

[deeya]

"Why General Motors Left Europe"
"Why GM Failed in India"
"Why Ford And Other American Cars Don’t Sell In Japan"

There's a pattern here...

[acent]

Yeah, this is mostly BS excuses. Opel was originally a German brand, so their products were, after their takeover, first perceived as German cars.

What actually went wrong? This:

GM would regularly rotate in and out "hot shot" managers at the top of Opel Europe. Their job performance was rated based on their ability to reduce costs. One manager would reduce costs by, say, 3%, then be replaced by the next manager who was incentivised to do the same.

Obviously, after enough rotations, Opel was purely focused on making cheap cars rather than good cars. Nothing GM released in Europe could qualitatively compete with the other European automakers. The Opel brand became associated with faulty, unreliable and cheap.

That was the end of Opel profitability in Europe.

[mowana]

Should have left Opel and Saab do it's own thing. Twenty-five years ago these companies were on par with the other European manufacturers, then GM sent their managers in and the rest is history.

[allanflores]

Jeremy Clarkson: "Because it's American. All American cars are rubbish."

[Max_-ztbm]

Just one year after being bought by PSA, Opel achieved an operating income of 859 € million, the first positive income since 20 years...

GM governance was just a big joke... Saab still remembers it.

[WBO-lpcp]

Opel was doing OK, till the US managers decided to go help them in 1990... The rest is history.

[GrijzePilion]

Same story as always: if you want to sell cars in Europe, make cars that are as good as Europe's.

[stylrart]

Why Europeans don't buy American cars? Simple answer: Europeans build better and more fuel-efficient cars.
Fuel is way more expensive in Europe than in America, so that's the two reasons.

[hannecatton]

Unfortunately the cars built by U.S. owned companies are poorly built. That is not being anti U.S. but simply stating fact.

[user_uif_ghg_wer_das]

30 years ago Opel and Audi produced cars of the same level in Germany, namely, the entry premium level cars, which were at the second tier ( 1st Mercedes, BMW, 2nd Audi, Opel, 3rd Volkswagen, Ford). Fastforward 30 years, Audi is a major premium/luxury brand in the world, while Opel is competing with Chevys thanks to GM's management.

[MrTVintro]

'3:35 If your big idea as an automaker is to sell trucks and suv's to Europeans you may as well give up before you start.

[peace]

I have watched US Corporations think they can take the US model transplant to another country and win. When business does not cater to local needs they fail.

[thewanderingrey]

"How hard it is to be global automobile brand" - well most Japanese and German brands made it, so it's probably just American incompetence.

[Mira_linn]

Wtf how can you blame unions when every carmaker in Europe have to deal with the unions especially the German automakers and all European car makers have to deal with the same laws and regulations. Maybe the problem is that us companies are bad at cooperating with the unions and rather wanna fight with them.

[MrWhiteVzla]

And yet, European manufactures do well in America. It's almost as if quality and design matters to car buyers

[infin]

Instead of paying big money to CEO, and management, spend those money on R&D, and quality control, then people may start to buy American car again.

[mannyzx]

Engineer: let’s make an improvement on our vehicles, make them better and keep improving them little by little. We will sell a better vehicle and slowly turn our image and sales around. Like Hyundai and Kia.

MBA: Nah, let’s sell it off, show a quarterly profit, keep Wall Street happy. We’ll worry about our next bonus after we get cash this bonus.