GM has no easy options when looking for a turnaround at its loss-making German brand.
GM CEO Dan Akerson is still not sure what to do about GM's money-losing unit Opel.
The German division of the Detroit automaker has no clear path to profitability but GM has ruled out a sale of the brand because its global operations are linked too deep to those of Opel.
Akerson is considering other re-structuring options but there are no easy answers. Gaining concessions from unions to cut costs is one such difficult option.
According to a Reuters source, "Europe is hard. There are so many structural impediments in the auto sector, which is so tied into cultural, media, political dialogues that it becomes very hard to make big changes, and big changes are often times what's needed, really, to solve the issues."
The European market where Opel operates is highly competitive and one where growth is slow, particularly in the mature markets of Western Europe. But Opel provides GM with very valuable technology and engineering prowess which the automaker uses to great advantage globally. For example, the Opel Insignia is sold as the Buick Regal in North America and China - where Buick has become a very successful premium brand in that fast-growing market.
Akerson was one of the few executives at GM in favor of selling Opel a couple of years ago during GM's bankruptcy. According to the report, Akerson believed that European markets belong to national automakers like VW in Germany, Renault in France and Fiat in Italy, with the pan-European premium brands like BMW and Mercedes-Benz operating at a higher market level.
But Akerson's view can be seen as being outdated with brands such as VW, Fiat and Renault having become globally successful automakers with strong Europe-wide sales in the last few years.
It may just be that all Opel needs is some time. The brand has a fresh product lineup which has been winning accolades from the automotive press. If Opel can pick up sales in the next couple of years a return to profitability will follow quickly.