General Motors Co. (NYSE: GM) has lost$16 billion on its Opel/Vauxhall division in the last dozen years, and the company may lose even more in the next dozen according to an analyst at Morgan Stanley. The best course for GM to follow would be to cut its losses and sell the Opel division before the losses mount even higher.
Still, selling the division won’t be cheap. Morgan Stanley’s analyst puts the the cost to GM at around $13 billion, which includes restructuring costs, an equity contribution to the buyer, and GM’s pension obligations to Opel. GM sees the situation differently:
“Despite the tough environment for the automotive business in Europe, we believe we have an opportunity to turn the Opel/Vauxhall business around and bring it back to long-term profitability,” GM spokesman Jim Cain said.
Last week GM announced last week that it had reached a deal to cut hours at two of its plants in Germany.
GM had a deal in the works for Opel in 2009, but refused to pull the trigger. Now the U.S. automaker probably wishes it had a second chance at such a deal. GM could have a long wait.
GM stock is up 4.4% today at $22.72 in a 52-week range of 18.72-$27.68. The share price rise is likely due to hope for a recovery in the Eurozone economy following today’s ECB decision.
Paul Ausick
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
