General Motors has been evaluating several different offers for its European Opel brand over the last few months – including bids from Magna and RHJ – but the Detroit automaker is reportedly considering a new direction for its Opel division.
According to Automotive News, General Motors is now mulling the possibility of keeping the Opel brand rather than selling it to an outside party. GM’s board has balked on choosing a preferred bidder for the Opel brand, possibly because the alternate plan is gaining favor.
Under the proposed plan to keep Opel, GM would raise about $4 billion to cover the cost of keeping the German automaker within the GM family. Some of that money would likely come from the German government, but GM would also have to find other funding sources.
Since GM is not allowed to use funding from the U.S. government to finance its international operations, the Michigan automaker could sell or mortgage its China operations to provide adequate funding to keep Opel, according to sources familiar with the situation. However, GM is one of the most successful automakers in China so swapping Opel for the potential in China might be a tough business case to sell.
