General Motors goes through a massive reorganization

Management reorganization at General Motors and the scaling back of the companys union with PSA Peugeot Citroen, have provoked certain insecurity over the carmakers strategy for Opel in the U.S. At the same time, European carmaker business seemed to become more stable.

A Reuters reported The sixth boss of Opel over the last ten years – Kar-Thomas Neumann has helped to land a multi-billion Euro investment from bosses in Detroit, which is considered a great splash at the loss-making business. The General Motors decision to withdraw its Chevrolet brand from the European market and become more focused on Opel and Vauxhall brands is also considered a Mr. Neumanns merit.

This month General Motors appointed Mary Barra for a chief executive officer, which made some Opel staff question these advances. Ms. Barra is said to had been chosen thanks to the fact she manages to bring “order to chaos” when it comes to global production development, as reported by Reuters earlier today. The new chief executive of the company is supposed to take care of vehicle development and make it even more efficient.

When it comes to using global platforms and minimizing the level of expensive customization, Opel feels quite pressured, because its ability to compete with rivals has been maimed by the European market.

General Motors Co.s reorganization does not stop here. Steve Girsky, who has successfully led a campaign concerning more investment in Opel, is to leave his position as a vice chairman of the company. One of the Opel employees, who specifically asked not to be named, said for Reurters: “A major Opel protagonist is leaving and nobody knows whether General Motors will maintain its high-level commitment to Europe.” One of the spokesmen of General Motors Co. explained that the company does not intend to change its position on Opel.

General Motors also announced that due to a failure to reach cost targets, the company is withdrawing from an alliance with PSA Peugeot Citroen. This was a great blow for Opel, which was relying on such a partnership in order to widen its range of small cars.

According to CNN Money, the current share price of General Motors Co. is 2.35% down, and its one-year return rate in 39.78% up. The 15 analysts offering 12-month price forecasts for General Motors Co. have a median target of 49.00, with a high estimate of 56.00 and a low estimate of 39.00. The median estimate represents a +21.59% increase from the last price of 40.30.