What to make a profit?

What to make a profit

General Motors is one of the most emblematic companies in Europe as it has been manufacturing cars on the continent for 90 years. After this time, he has decided to leave the continent. The decision has already taken a long time. Management has made the decision and its first premise is that size matters. But not in the sense of being the biggest since right now that is not their priority, but in reducing its size to make it more profitable in these times.

What to make a profit

General Motors has decided to sell the operations of Opel and Vauxhall to the group that integrates Peugeot and Citroen for $ 2.3 billion. General Motors bought the German manufacturer after the First World War for 33 million US dollars. Its golden age was the great part of the 1990s when it came to compete with Toyota and this laid the foundations for growing in the Asian market.

We can ask from what year General Motors started to accumulate losses in Europe. Why did not your restructuring plan work in Europe? What is the current situation of General Motors? What is going to be the strategy of General Motors from now? Decisions taken since General Motors began to fail and accumulated losses in Europe since 1999 amounting to 22.5 billion US dollars. The most complicated years were 2008 and 2009 with US $ 6.2 billion of losses reaching the situation of the suspension of payments?

The political pressure during that time to sell Opel was very strong, because it was not wanted to finance with public money a ransom. The company endured and improved the accounts of the company from 2012. In 2016, operating losses in Europe were US $ 260 million, compared to US $ 810 million in 2015. Market share stabilized around 6 percent since 2012, but in 2000 it was around 10 percent of market share.

General Motors’ restructuring plan in Europe has not worked

General Motors about 5 years presented a restructuring plan to make Opel profitable in a sustainable way. But the efforts that have been made have not come to fruition, because the market share is still very low. The conclusion is that the efforts to be made will not bring an acceptable return to General Motors.

General Motors takes time to understand the global industry in the automotive sector and already had to reduce its size in a process of almost bankruptcy restructuring. At this time, Toyota took advantage and managed to take market share. If General Motors leaves Europe, it reduces by 10 percent the volume of its sales.