News: General Motors stands by electric cars in the face of dismal sales

 

57,000 sales out of just over 14-million. That's how many electric cars sold in the United States last year, causing more than a few people to announce the second death of the electric car. But General Motors' US president Mark Reuss has come out fighting for the battery car, saying that he expects Americans to embrace the technology more and more. 

“The electric vehicle is not dead. We at GM believe that the public will accept and embrace electric vehicles. Some people already have" said Reuss at the Automotive News World Congress in Detroit. 

 He also promised that not only would the next generation of Chevrolet Volt, sold here as the Opel Ampera, have a greater battery range, it would also be thousands of dollars cheaper, as GM is now able to make batteries and electric drivetrains more efficiently. 

News: Can GM's new plan save Opel?

In a week when rumours once again surfaced that Opel was up for sale to PSA Peugeot Citroen, the German firm's US masters at General Motors have come up with (another) new plan to turn around the loss-making car company.

Interestingly, GM Europe boss Steve Girsky admits that this is the first Opel turnaround programme "not to include hope as part of the package" and the 10-year plan centres on cutting costs (Opel needs to get its fixed costs down by about €500-million, and make around €1-billion of savings in its parts-and-platform sharing agreement with PSA) and to introduce 23 new models (along with a bevy of new, more efficient engines) by 2022. The plan, rather playfully, is called Drive! 2022. 

If everything works, Opel will hit break-even in a couple of years and move back into profit by around 2018. Some of the plan has already been implemented; the tie-up with Peugeot and Citroen is already well progressed, the decision to close the loss-making factory in Bochum has already been taken and several key new models, including the Astra saloon, Adam city car and Mokka compact SUV, have already been introduced.

Opel actually had quite a good year in 2012, finishing up as Europe's third best-selling brand and going a long way to winding down stocks of unsold models. Next up will be to start building non-Opel-badged models in Opel's German plants, to take up the slack in capacity. Expect to see Buicks for China (China is now a massive market for this classic American brand) and mechanically-identical Chevrolets for Europe built in Russelsheim and elsewhere. And, although the plan doesn't overtly admit it, expect too to see the next-generation of Citroen C5 and Peugeot 508 built on a common platform with the Opel Insignia in Germany.

News: Opel, Peugeot & Citroen to merge?

Troubled car brands Peugeot, Citroen and Opel could be set for a full-on merger, which could see either General Motors buying out Peugeot and Citroen from parent company PSA or Opel and Vauxhall moving into French ownership.

The proposed move, reported by Automotive News, is still very much at the embryonic stage. GM and PSA have already linked Opel and Peugeot-Citroen in a parts and manufacturing sharing agreement designed to give the two firms €2-billion in savings every year and to try and get them back on their feet in the face of increasing competition from Volkswagen and Hyundai-Kia.

A full-on merger or buyout is a beast of a different type though, and would face colossal hurdles from unions, politicians and legal ramifications. For a start, it would almost certainly see the closure of at least one or two more major factories, above and beyond the closures and job losses already being planned in France and Germany. Secondly, with car making still being seen as a political jewel in the crown in both nations, it's hard to see France or Germany's politicians standing idly by while one side or the other is sold off.

While this news has only broken this week, apparently initial discussions on the subject were held earlier this year when the PSA-GM tie-up was first announced, and it's thought that the worsening European car market, combined with investors and analysts putting major pressure on GM to do something, anything about ailing Opel, is putting the plan back on the front burner.

News: Regulator investigates Fiat cash pile

Consob, the Italian stock market regulator, is apparently investigating Fiat's reputed €23-billion cash pile and asking why Fiat boss Sergio Marchionne isn't dipping into it to prop up Fiat's investments in the flagging Italian economy.

Fiat itself has cash reserves of around €12-billion, with the other €11-billion belonging to Chrysler. According to reports, Fiat can't access the Chrysler cash for European investment (or to subsidise European losses) because of a complex deal agreed with the US Government when Fiat rescued Chrysler from bankruptcy.

Even so, Marchionne, the Italian Prime Minister Mario Monti and Consob have been at repeated loggerheads over the past few months. Fiat is threatening to close down another Italian factory (it closed a plant in Sicily last year) and is idling some plants, including one that builds the Panda. That's because Marchionne sees nothing but financial pain in Europe right now, and has put a stop to all major investments and new model developments for the time being, leaving the burgeoning Chrysler to expand in the now-healthy US market and deliver much-needed profits.

The Italian Government, of course, is not keen on this at all, and the investigation (which Fiat currently says it is, officially, unaware of) is being seen as a strong-arm tactic to get Marchionne to unlock at least some of the money to invest in the Italian market.

Marchionne may be holding on to his money for another reason though; Opel. Opel is continuing to lose money for General Motors and analysts Morgan Stanley last week said that it expects that co continue, at the rate of $1-billion a year, through to 2021. GM is being urged to sell Opel and cut its losses, and Fiat, which made an offer for Opel amidst GM's 2009 bankruptcy, is thought to be once again interested.

GM is quashing such rumours though, saying that Opel is an integral part of its operations and will continue to be so, and that the recently-inked tie-up with PSA Peugeot Citroen is progressing well and is expected to save both companies €2-billion a year.