General Motors’ CEO Dan Akerson seems to have delivered the impossible: a profitable European business operation. Hemorrhaging cash for more than a decade now, GM’s Opel division may have finally stopped the bleeding, or so Akerson says.
The news comes by way of a report by Bloomberg in which the CEO said that all business units at the world’s largest automaker were profitable. That would include the perpetual loss leader that is GM’s European operation.
Not since 1999 has Opel made a profit. In fact, GM’s European operations have lost a combined $14.5 billion — with a “b” — since the end of last century. To be fair, that figure includes former GM asset Saab, a brand that largely acted only as a lead weight on any sort of momentum GM Europe had.
That’s not to say an eventual profit wasn’t expected. Last quarter, Opel turned revenues of $102 million before interest and taxes but returned $395 million as a goodwill impairment cost stemming from the company’s 2009 bankruptcy.
It was rumored that not long after GM’s reorganization Opel would be on the selling block. It was, in fact, in 2009 when GM had a tentative deal to sell the division to manufacturing contractor Magna International. That, however, wouldn’t have made business sense, as much of GM’s worldwide car development comes from the European operations. GM Europe had significant involvement in engineering both the Buick Regal midsize sedan and best-selling Chevrolet Cruze compact car.