GM: VW CEO comments about Opel ‘regrettable’

GM: VW CEO comments about Opel ‘regrettable’

Automotive News | July 13, 2011 – 4:46 pm EST
UPDATED: 7/13/11 8:07 pm ET

DETROIT (Reuters) – General Motors on Wednesday called comments made by Volkswagen AG’s chief executive about a possible sale of the U.S. automaker’s Opel unit “regrettable.”

“In Wednesday’s edition of the Frankfurter Allgemeine Zeitung, Volkswagen CEO Martin Winterkorn commented on rumors regarding Opel, which continues a regrettable pattern of fanning speculation as Opel makes solid progress in its restructuring, in generating improved operating results,” GM said in a statement.

Speculation about Opel’s future began in early June with reports by German media that the European unit could be sold and possible buyers included Chinese automakers or Volkswagen.

Opel Chairman Nick Reilly on June 30 said GM was “very satisfied” with Opel’s progress, but failed to quash rumors GM was mulling a sale, saying the company does not comment on speculation.

GM dropped plans to sell Opel in 2009 after months of negotiations, and embarked on a restructuring to get the unit, which lost $1.6 billion last year, back on track. GM has lost $14.5 billion in Europe since 1999.

Winterkorn told the German newspaper he did not think Korean automaker Hyundai Motor Co. would be interested in buying Opel if it was sold, but Chinese automakers would love to gain access to Opel’s technical center and distribution network.

Winterkorn added that it might not be wise to give up 5,000 engineers at a time when everybody is looking to hire such people, according to the newspaper.

German magazines Der Spiegel and Auto Bild reported last month that GM may be considering a sale of Opel. GM has called such reports speculation and not commented on them. The company said it’s restructuring the business and is showing progress.

Winterkorn shouldn’t have made the remarks about a competitor, said Maryann Keller, principal of Maryann Keller & Associates in Stamford, Conn.

“To suggest that only a Chinese company would be interested is unseemly,” she said.

In May, GM said its European operations would have broken even in the first quarter without a $395 million charge to goodwill. Opel’s market share in Europe for the first five months of this year rose to 7.4 percent from 7 percent.

‘He only speculated’

GM declined further comment beyond the statement.

Carsten Krebs, a Volkswagen spokesman, confirmed that Winterkorn made the remarks at a press event in Berlin. Winterkorn was speculating who may buy Opel if it was for sale and didn’t say the unit is definitively for sale, Krebs said.

“He only speculated,” he said. “The journalist asked him a question and he speculated. If you read it properly, he doesn’t think GM is selling Opel.”

Keller said that GM would have a tough time selling the unit. Chinese companies would want the technology for Opel’s cars, which are used for other GM vehicles like the Chevrolet Malibu and several Buick models. GM would want to keep intellectual property rights, which would make a deal difficult to reach, she said.

“If GM sold Opel to a Chinese company, it would only hasten their ability to eat GM’s lunch,” Keller said. “Without the intellectual property, GM would only be selling some high-cost plants.”

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