Automotive News - September 15, 2008 - (Page 74)

General Motors Story 24 /100 Pivot Point: GM looks beyond the United States GM began its overseas empire by buying established companies Among the purchases: Vauxhall in England, Opel in Germany and Holden in Australia Bradford Wernle he roots of General Motors’ overseas subsidiaries reach back into the pre-automotive age to saddles, sewing machines, bicycles, marine engines and even mythical creatures and knights-errant. GM didn’t become a global powerhouse overnight; it accumulated its far-flung empire piecemeal. Working according to the credo of empire builder Alfred Sloan, GM kept a hands-off policy when it came to the cultures and operations of its foreign subsidiaries, albeit with a touch of Detroit paternalism. So while the Ford and Toyota brands span the globe, some of GM’s brands remain regional. Few American consumers would know that the Saturn Astra started life in Germany as an Opel Astra or that the Pontiac G8 originated in Australia as a Holden Commodore. The Vauxhall brand is still sold only in Great Britain, even though its vehicles now are just rebadged Opels. Sloan divided the overseas business into two categories: overseas export sales of U.S.built vehicles and overseas production. In the latter category, the ever-cost-conscious GM decided to build its business mostly by buying established companies rather than building them from scratch, particularly the three that have kept their brand identities: Holden, Opel and Vauxhall. Those companies have retained their names, logos and distinctive cultures. T The Opel brothers of Germany, from left: Carl, Wilhelm, Heinrich, Friedrich and Ludwig © GM Corp. GM’s global milestones 1911: GM Export Co. established to handle sales of vehicles outside North America. 1918: GM of Canada Ltd. formed by purchase of McLaughlin Motor Car Co. McLaughlin car was based on Buick Model F. 1923: GM opened first European assembly plant in Copenhagen, Denmark. 1925: GM acquired Vauxhall Motors of Luton, England. General Motors do Brazil set up in Sao Paulo. GM established operations in Argentina, France and Germany. 1928: GM India established. 1929: GM bought Adam Opel AG in Germany. GM China opened headquarters in Shanghai. 1931: General Motors-Holden’s Ltd. formed by merger of Holden’s Motor Body Builders Ltd. and GM (Australia) Pty. Ltd. 1935: Opel produced the Olympia, the first car built with an all-steel integrated body and frame. GM do Mexico started operations. 1938: GM sales outside U.S. and Canada topped 350,000 units. 1948: Holden’s launched Australia’s first mass-produced car. 1972: GM joint venture began making vehicles in South Korea. 1980: GM announced plans to build 5 European plants: 3 in Spain and 1 each in Austria and Northern Ireland. 1986: GM acquired Lotus, English sports car maker. 1989: GM bought 50 percent stake in Saab Automobile AB of Sweden. 1993: GM sold Lotus. 1999: GM joint venture began building Buick Regals in Shanghai. 2000: GM opened modular assembly plant in Gravatai, Brazil. 2002: GM agreed to buy most of the assets of Korean carmaker Daewoo Motor Co. Source: gm.com A mercenary beginning Although GM came into being in the 20th century, the origins of the Vauxhall brand stretch all the way to the 13th century. That’s when King John of England employed a mercenary soldier named Fulk le Breant. The story has a fairy tale ring to it. In exchange for his service, the king rewarded Fulk with some land south of the River Thames in London. The land became known as Fulk’s Hall, which morphed into Fox Hall, then Vaux Hall and, finally, Vauxhall. Fulk adopted an emblem featuring a mythical creature called a griffin, with the body and hind legs of a lion and the head, wings and talons of an eagle. A modern version of his emblem still graces the hoods of today’s Vauxhall vehicles. In the 19th century, marine engineer Alexander Wilson founded the Vauxhall Iron Works on the site of Fulk’s former property and built marine engines there. In 1897, the ironworks built a single-cycle gas engine to power a river launch named the Jabberwock. After further development, a version of the Jabberwock engine was installed in Vauxhall’s first automobile, built in 1903. The engine produced 5 hp, and the driver steered with a tiller. Vauxhall moved to Luton, England, north of London, in 1905. But it wasn’t until 1925 that GM bought Vauxhall, for $2.5 million. Vauxhall wasn’t even GM’s first choice for gaining a toehold in England. That would have been Austin. But Sloan and his emissary, James Mooney, who headed General Motors Export Cos., got cold feet and backed off. A 1907 poster of the Opel complex in Ruesselsheim, Germany partner, casting its acquisitive gaze on French carmaker Citroen. In 1919, Billy Durant dispatched a team, which included Sloan, to Paris to talk Andre Citroen into selling 50 percent of the company he had founded. After several weeks of intense discussions, GM decided to pass on Citroen because the GM team thought it would have to invest too much to modernize Citroen factories. Michelin would buy Citroen. GM’s decision on Citroen would haunt Sloan because the American company never did manage to set up vehicle production in France. Key acquisition in Germany GM had much better luck in Germany, where Adam Opel had become a powerhouse long before GM arrived on the scene. In 1862, Adam Opel, a journeyman metalworker, launched a sewing machine business in his hometown of Ruesselsheim, Germany. The sewing machine business thrived, and Opel built a factory with adjoining living quarters for employees in 1868. In 1872, Opel even set up a health insurance plan for his workers. Opel and his wife, Sophie Scheller, had five sons who became avid bicyclists. So the Opel factory began making bicycles and became the world’s leading bicycle maker. GM says non! to Citroen Six years before the Vauxhall acquisition, GM made its first attempt to find a European 74 September 15, 2008 Adam Opel died in 1895, four years before the company made its first car. It bore the cumbersome name “Opel Patent Motor Car, System Lutzmann,” taking part of the name from the company’s first partner, Friedrich Lutzmann. After Adam Opel died, his widow and five sons managed the company. But car sales were poor, so they parted company with Lutzmann and signed a new deal with a French manufacturer, Alexandre Darracq, to put Opel bodies on Darracq chassis. By 1914, Opel had become the largest carmaker in Germany and a technology leader. The company developed race cars with fourcylinder engines featuring four valves per cylinder and an overhead camshaft. By 1928, Opel was the volume leader in Germany, selling 44 percent of all the Germanmade cars sold in that country and 26 percent of all cars sold there. Opel’s advanced technology and modern manufacturing plants caught the eye of Sloan, who was looking for a larger footprint in Europe. Sloan and his team decided to buy Opel for $26 million. He liked the idea of acquiring a company that already had established itself in its home country. AUTOMOTIVE NEWS http://www.gm.com

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