On Thursday General Motors will publish its fourth quarter results and reveal just how much its German subsidiary Adam Opel has lost in 2011. The loss is expected to be EUR 1 billion.
"It's a mess," said Michelle Krebs, a senior analyst at Edmunds.com. "GM's back is against the wall on Opel. It just is going to have to do something there. So I think we will see something coming in that regard."
The Opel unit has suffered from nearly $14 billion in losses since 1999 and GM has lost its patience. And the US Government surely is upset that GM did not sell Opel as intended back in 2009.
"They're very concerned about it," Krebs said. "The whole European situation. The (euro zone) debt crisis is lowering car sales from last year to this year. Opel has always been a problem for GM. And there's a huge problem in Europe overall with the total industry. There's too much factory capacity for the demand. It's a very mature market. The market's not going to grow, and yet they've got all this capacity."
What makes matters worse for Opel is that GM is doing well and making money in all other markets around the world.
"GM had a good year in the U.S.," Krebs said. "Lower incentives, improved sales volume, increased market share, those are all a winning formula."
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