Howes: GM sells off assets in Europe in effort to win control of automotive landscape
The big story from General Motors is its decision to bail on the European market by selling off its Opel and Vauxhall units to the French PSA Group.
Detroit News business columnist Daniel Howes thinks there will be more to come in this worldwide automotive "dating game."
Howes said GM stands to net about $2.9 billion in the deal, but that number might be misleading. The company is spending about as much as it's getting in the deal. The important part of this transaction is the amount of capital it frees up so that the automaker can invest in more profitable aspects of the company. So this is a long-term, big picture move for GM.
"This is very different from the General Motors that we've known for decades and decades," Howes said. "That group was always very conservative. They always felt like they needed to be a player, if not the lead player in every part of the world, regardless of how good or mediocre or poorly they were doing in that part of the world. And this new leadership and this new board of directors has basically said we're not going to do that anymore. Their goal is to be the most valuable and valued car company in the world and this is one step in that direction."
The market did not have a kind reaction to the announcement. GM's stock price fell by 1%.
Howes said anytime you walk away from one of the three biggest markets in the world, you're going to create some uncertainty in the marketplace.
Listen to the full interview above to hear about the automotive "dating game" that's going on, to learn if GM is putting passenger cars on the back burner, and to understand what impact this new aggressive approach by American car companies will have on the industry.