Why General Motors Company (GM) Must Fix Europe

And GM’s joint venture with struggling French automaker PSA Peugeot Citroen , which includes a series of parts-sharing and joint-vehicle-development programs, is expected to add significant savings and economies of scale over the next couple of years.

Has GM really done enough?
GM’s not done, of course. New CEO Neumann’s plans for Opel won’t take shape for several months, at the earliest. If Europe’s auto market continues to worsen, more drastic action – including, perhaps, a bankruptcy for Opel – could be in the cards. And negotiations between GM and Opel’s powerful labor union are ongoing, which could yield further improvements – or could lead to a costly outbreak of labor strife.

Will it be enough, if it all goes as planned? It could be. Unlike Ford, which last fall announced a comprehensive plan to overhaul its own European decision, GM’s plan has emerged in fits and starts – with, seemingly, plenty of false starts and on-the-fly course changes.

Ford’s plan for Europe looks a lot like the approach the Blue Oval took to restoring its U.S. operation, and the company’s success at home inspires confidence in its chances in Europe. GM’s approach hasn’t inspired nearly the same level of confidence, not least because its current management team doesn’t have the same kind of resounding U.S. turnaround under its belt.

That doesn’t mean it won’t work. But it will bear careful watching. Stay tuned.

The article Why GM Must Fix Europe originally appeared on Fool.com and is written by John Rosevear.

Fool contributor John Rosevear owns shares of General Motors and Ford. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford and General Motors.

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