The Wall Street Journal - Two years after scrapping plans to sell its Adam Opel unit, General Motors Co. is open to selling the struggling brand if it gets an offer more favorable than the one it rejected in 2009, according to people familiar with the situation.
An overhaul of the Ruesselsheim, Germany, operation, under way for more than a year, hasn't brought Opel back to profitability. Increasingly the company faces competition from GM's separate Chevrolet operation in Europe, which has expanded rapidly by focusing on sales of lower-cost vehicles.
Opel Chief Executive Karl-Friedrich Stracke dismissed reports GM was putting Opel up for sale as "pure speculation" in a memo to employees on Thursday. "I'm asking myself why this issue is surfacing again now that Opel is back on the route to success," he wrote. "We proved that the company is on a very good way and therefore represents a great value for GM."
GM Chief Executive Dan Akerson and other top executives are open to selling Opel, if they were to get an attractive offer, those people familiar with the matter said. However, there is no deal imminent, other people close to the matter said.
In recent months, Mr. Akerson has tried to accelerate Opel's turnaround. In April, he replaced Opel head Nick Reilly with Mr. Stracke. Mr. Reilly remains president of GM Europe. The company also has hired outside restructuring firms, including AlixPartners LLP, to recommend ways to boost profit margins and trim costs.
On Thursday, two German magazines reported GM had renewed talks to sell Opel.
In 2009, GM nearly sold Opel to a group lead by auto-parts supplier Magna International Inc., a deal that had been pushed by the German government as GM spiraled into bankruptcy. Under that deal, the consortium would have paid GM €300 million ($437 million) in cash, preferred stock valued at €200 million and invested €500 million in Opel.
But at the 11th hour, GM backed out because Magna would have gained access to sensitive intellectual property and GM would have given up important design and engineering facilities in Europe.
Opel remains a critical supplier of design and technology to GM operations in other regions. A number of GM's more successful vehicles in the U.S. and globally have Opel roots.
This year, Opel's sales are up 12% through May compared to a year ago, with market share up as well, helped by well-received new vehicles including the Opel Meriva, a small minivan, and the Opel Astra compact. The company has said it could make money in 2011, excluding restructuring costs, which would be a year ahead of schedule.
In addition to ensuring Opel has a long-term future, the restructuring could make the unit more attractive to potential buyers.
Mr. Akerson has expressed impatience with losses at Opel and is less willing than his predecessors to accept marginal profits in Europe, people familiar with his thinking said.
Adam Opel was once the largest auto maker in Europe by sales but sales dwindled amid quality problems. It remains burdened by high-cost labor in Germany, where it operates several plants and has a large engineering center, and where unions have opposed job cuts.
Since 1999, Opel has lost more than $13 billion cumulatively, despite several restructuring efforts.
In the first four months of this year, Opel's sales have risen 3% while overall European sales have slipped 2.7%.
Opel faces tough competition from rivals Volkswagen AG and Ford Motor Co.'s European division, as well as GM's own Chevrolet business, which sells Korean-made cars and has made inroads in many eastern European markets due to its lower-cost vehicles.
