From Germany with love. All new Opel Insignia inspired Buick Regal will go on sale in North America next spring.

In advance of its official debut at the 2009 Los Angeles Auto Show on December 2nd, General Motors has taken the wraps off of its all new Buick Regal, a 2011 model which will go on sale in North America next spring. Based on the Opel Insignia, the Regal will be built in Germany and shipped across the Atlantic to slot below the Buick LaCrosse.

China First

The new Regal model is already on sale in China and will be powered exclusively by four cylinder engines. Paired with a six-speed automatic transmission, GM expects that the sedan will achieve at least 30 mpg highway. A turbo-charged model will roll out summer 2010 to give customers the option of getting a car with an extra bit of performance.

Though the Los Angeles show is still weeks away, GM introduced the Regal to LA customers on Thursday. That particular showing revealed the turbocharged model equipped with a driver selectable suspension system and Euro-tuned chassis. Buick is touting the Regal as a sport sedan with Susan Docherty, general manager of Buick GMC proclaiming that the all new Regal is “like nothing you’ve ever experienced from this brand.”

GM says that the Buick Regal is like nothing sold by this brand previously. Maybe Buick should consider a "Grand National" version of the car too...wouldn't that help enthusiasts to sit up and take notice!

Premium Models

As part of GM’s quest to have Buick battle the lower end of the premium car market, the automaker says that the Regal’s competitors are the Volvo S60 and Acura TSX. Essentially, GM is targeting entry level Lexus, Acura, Volvo and other upscale brand’s products with Buick models, while positioning Cadillac to battle the more luxurious models on the market.

Yes, that means that GM is calling out Lexus and others by identifying some of their models as luxury (LS 460) and others as premium (IS 350), hoping that its own customers realize those distinctions when comparing Cadillac and Buick models. Will that strategy work? It may which would allow GM to sew up the upper end of the market with these two brands.

2011 Regal

Powered by its front wheels, the first of the Regals will be offered in just one trim level to start – CXL. Featuring a 2.4L I4 engine with 182 horsepower, a smaller 2.0L turbocharged I4 will arrive later, producing 220 hp.

Among the notable features of the 2011 Regal will be standard 18” wheels; stability and traction control; four-wheel disc brakes with four-channel anti-lock braking system, brake assist and electronic parking brake; 12-way power, heated, leather seating for the driver; Bluetooth capability, XM Radio and of course OnStar; available navigation system with flash and hard drives; four link independent rear suspension; and more.

GM only offered one interior shot of the Regal. Be as it may, you're looking at it.

German Love

GM hasn’t announced pricing yet for the Regal, which may be something that they’re waiting to share in Los Angeles or perhaps just in advance of the model’s release next year. Interestingly, this model is being built by Opel for Buick. Now that Opel is remaining in the GM fold, maybe the automaker decided to throw German workers a bone by having them handle production.

See Also — Buick: From Bland To Beautiful

Photos courtesy of GM Corp.

Maddened Germans

German unions as well as politicians were angered by the GM reversal, believing that Opel’s best chance of survival could be found elsewhere. Though the proposed new owners were still planing to shut several factories and eliminate thousands of jobs, most had felt that their positions would stand a better chance of being preserved had GM been out of the picture.

Nick Reilly, who is GM’s international operations chief, will lead Opel/Vauxhall on a temporary basis until a new leader has been found. Reilly will be replacing Carl-Peter Foster who heads up GM’s European operation and begin the transition to find his replacement.

German Boss?

According to Bloomberg News, “There is a view in Germany that the problem with Opel is incompetent American management,” said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ontario. “To dispel that, GM had better put a German in charge who has the confidence of the German government and the people.” The Germans have discovered what Americans have long known – GM is an administrative disaster.

Just hours before GM announced its reversal, Foster endorsed the sale of Opel to Magna and Sberbank, the latter Russia’s largest bank, holding more than 25% of that country’s banking assets. Foster believed that the Magna-Sberbank tie up would make it easier for Opel to gain access to the Russian market, a statement that likely cost him his job – talk about bad timing!

Fritz Speaks

So why the reversal on GM’s part? According to CEO Fritz Henderson a few things — “While strained, the business environment in Europe has improved. At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.”

We’ll see about that. Perhaps GM has come to the conclusion that without a strong European base, they won’t be much of a factor beyond China and North America. Yet, by flip-flopping with Opel, they’ve angered those who can provide the needed support to save the brand, people whose very livelihood is tied up in making Opel and Vauxhall work.

As for Lutz, it sounds like he’ll be the right buzz for the German hornet’s nest!

Opel Stays

As if this story isn’t dramatic enough – Hummer and Saab are being sold while Pontiac and Saturn face closure — GM has suddenly reversed course and decided to keep its Opel unit, its principal European brand. That move comes as the automaker admits two things: 1) the attempted sale of Opel to Magna International and a Russian enterprise has been a huge headache; and 2) the company’s US commercial activity now appears to have been stabilized allowing GM to focus its attention on other markets.

Behind the scenes – but certainly not acting invisibly – German Chancellor Angela Merkel had been working to finalize the sale of Opel, promising to extend billions of dollars in loans to the company in a bid to preserve jobs in her country. That move set off a battle in other European countries where Opel/Vauxhall plants are located since it appeared likely that some of those factories would be closed down as the new owners realigned production capacity with customer demand.

The European Union eventually stepped in, effectively requiring Germany to state that funding for Opel would have been provided regardless of who bought the company. In the meantime, GM renegotiated the deal to retain a 35% stake in Opel, signaling that it wasn’t about to let go of the company entirely.

Global Sales

Even as its US operations have been in shambles, GM has enjoyed unparalleled success in China which suddenly became GM’s largest market this past summer, with more cars sold there than in the US. Sales in other markets including Asia, Australia and most of the rest of the Americas have also held up, demonstrating to GM management that better days are on the horizon.

Perhaps coincidentally, GM also realized a month over month sales gain for its US operation in October 2009. Sales climbed by 4.7%, representing the first monthly increase since January 2008. True, October 2008 was the first full month of car sales following the stock market collapse of mid-September 2008, but GM did manage to improve its position by beating out key rivals including Ford, Chrysler, Toyota and Honda.

Story Unfolds

We’ll probably get a clearer picture of where GM is headed in the coming weeks, if not days as the company details its strategy. Might the Opel reversal translate into a stay of execution for Pontiac or Saturn? That’s doubtful, because it appears GM is holding onto those brands it really wants to nurture as it surveys the rapidly changing global market and plans its business strategy accordingly.

Magna To Take Control

Earlier today, GM announced that they had chosen Magna International to buy a controlling 55% stake in Opel which includes Vauxhall. GM will still own 35% of the company while employees will now own 10%. The move followed a meeting of GM’s new directors on Wednesday who authorized the deal.

According to The Wall Street Journal, Magna International which is Canada’s biggest auto parts manufacturer, will own the controlling stake of Opel with Sberbank, a Russian lender. Magna and its Russian partners have been trying to win control of Opel, even ceding to GM demands to rework its original offer. GM had expressed concern that selling Opel would hurt its other operations in Europe, particularly the Chevrolet brand which has been getting some traction of late.

Victory For Chancellor Merkel

The deal, if approved, will end months of intense negotiations that have included German federal and state governments who have expressed a strong interest in preserving Opel. With more than 25,000 German jobs at stake, German Chancellor Angela Merkel has been working diligently to preserve them. Chancellor Merkel has promised to extend additional financial assistance to Opel with the sale to Magna and is herself up for reelection later this month.

Opel and its British counterpart Vauxhall will be part of the deal when it is finalized. Britain has expressed her own concern about the deal as five thousand British worker are employed by GM Europe.

More Deals Forthcoming

With the Opel deal coming to a conclusion, GM will be working to finalize its plan to sell Hummer to a Chinese business, Saturn to the Penske Group and Saab to a consortium of buyers led by Koenigsegg, the Swedish exotic car manufacturer. Yesterday, The Auto Writer reported that OnStar, its premium in-vehicle navigation and emergency assistance subsidiary is not for sale.

Source: The Wall Street Journal

See Also — GM Decides on Opel Deal with Magna

Fritz’s Funding Initiative

GM’s new board, which was put together after the company filed for bankruptcy protection this past Spring, has tasked CEO Fritz Henderson with putting a funding plan in place by the time the board convenes for its next meeting in early September. The US federal government which owns a majority stake in GM isn’t involved in the move, although several of the board members are Obama administration appointees.

When GM first announced the sale of Opel, several parties stepped forward with their offers including Magna International who was partnering with a pair of Russian companies to buy Opel. GM initially welcomed the move, but seemed to pull back when it became clear that technology sharing and rights to the Russian market might be compromised. A number of current GM models have been designed by Opel including the Chevrolet Cruze, the automaker’s compact world car; what would become of these models is a source of much speculation.

Magna, RHJ and GM

While Magna was reworking its bid and as the German government crafted a plan to provide funding for Opel, RHJ International submitted their own bid which caught the attention of GM. Though RHJ wasn’t expected to qualify for German financial assistance, GM appeared intrigued that the company might be interested in selling Opel back to them in a few years. With that move, some analysts began to wonder if GM would try to find a way to keep Opel, thus the decision by GM’s board to explore that option once again.

The Obama administration could face stiff international opposition from Germany and Russia should GM end up holding onto Opel. Both governments invested a lot of time and money to shepherd the sale of Opel through, a company which has cost GM billions of dollars since losses began to mount nearly ten years ago.

Finally, should GM end up keeping Opel, Germany will worry that the company’s heavily unionized and highly paid workforce could face job cuts, a prospect which could have a negative effect on the German economy.

Source: The Wall Street Journal

See Also — Magna Wins Bid For Opel

The deal still must receive the formal approval of all four German states involved in the negotiations with some other details to be worked out. However, it appears that by early July Opel, Vauxhall and GM’s Chevrolet operation in Russia will be firmly in the hands of the Canadian based company, freeing GM to concentrate on restructuring its other core businesses.

Fiat SpA Loses Out, Gets Chrysler

Magna was in competition with Fiat SpA for control of Opel, but the latter lost out when fears that the Italian automaker would close several German automotive plants weighed in. Though a loser in the battle for Opel, Fiat will most likely be assuming control over Chrysler early next week. Fiat still has a bid in for Saab, the Swedish automaker wholly owned by General Motors, but competition for that company is stiff.

With the sale of Opel and related operations, GM Europe will be a much smaller entity offering Chevrolet, Cadillac and Corvette vehicles for the long term if parent GM Corp. is able to emerge from bankruptcy in the coming months intact. GM Europe also sells vehicles representing the Hummer and Saab brands, but both those companies are for sale and will likely be closed down or sold off before 2009 comes to an end.

The Auto Writer will be following closely GM’s pending bankruptcy and restructuring in the weeks and months ahead.

Source: Automotive News

At the same time, the industry is going through a deep cleansing, one that will rid it of excess capacity, inefficient operations and see several brands disappear. I believe that Ford will replace GM as the largest producer of cars in the US followed by Toyota. Hyundai and Kia will continue to gain market share while Chrysler’s future is hinged on its relationship with Fiat, a very precarious one at that.

GM Faces A Deep Challenge

Looking closer at General Motors, I now see its US operations pared to the point where only three brands will survive. Despite President Obama’s optimism, it’ll take years to settle GM’s debt as both bondholders and union members hold firm. Now that the president has signaled that he won’t let GM die, what do these parties have to lose? A lot if they don’t hold their ground.

The Good, the Bad and the Ugly

In keeping with the tradition of Sergio Leone, I offer to you the following categories to define GM’s future, particularly as it relates to its critical North American base:

The Good — Chevrolet comprises a full 60% of GM sales, therefore the Chevy brand is the face of the new GM. If this brand isn’t healthy enough to compete against Ford, Toyota, Honda, Nissan, Hyundai, Kia and Volkswagen then the company will die.

Cadillac is the premium bookend for GM, a luxury division that needs additional assets. The CTS franchise is a success, the SRX a worthy model, but the replacement for the STS/DTS is a mystery. As for the Escalade, it will probably soldier on as a car based crossover at some point. Lincoln wasn’t much of a threat for the past decade, but now Ford’s luxury division is fighting back, positioning itself to leapfrog Cadillac.

The lifespan of Buick depends on how well the company emerges from restructuring, bankruptcy or not. Its Chinese base is upholding the brand, but in order to be a good middleground brand for GM, it needs some product loving. And quick.

The Bad — The Pontiac G8 is a knock out car, but not enough to keep the brand alive.  Cash strapped GM cannot afford to keep Pontiac alive, so may it rest in peace. The G8 could find its way over to Chevrolet…let’s hope so!

The GMC brand can now die, allowing GM to consolidate Chevrolet trucks with GMC. They’ll be a big battle with Buick-Pontiac-GMC franchised dealers, with some likely to gain a Chevy Trucks franchise in their settlement.

The Ugly — No longer relevant and a big embarrassment, Hummer will probably cease to exist unless a foreign, niche manufacturer buys the brand, its dies and assembles Hummer elsewhere.

There isn’t much that can be said about Saab unless the pending new owner of Volvo makes a pitch for the brand to create Scandinavian Motors. Nope, I don’t see that happening at all.

Pity, poor Saturn — it was once a decent idea that should have been dismissed long before a plant in Spring Hill, TN was built for “a different kind of car company.” Okay, I’m biased: I leased a 2001 Saturn L-Series and actually liked the car, body panel gaps and all.  But, Saturn held Chevrolet back and was always a tremendous financial drain on the automaker. I would hate to see it become a supply house for a Chinese or Indian automaker. Peugeot? Maybe.

Ups & Downs With GM

Life at GM will never be the same, a company whose heritage is a mixture of lousy production methods (pre-1980s), cool technology (OnStar) and stiff competition (Toyota, et al).

If the company does survive, it may eventually have to hook up with another automaker to stay in business. Perhaps Carlos Ghosn would be interested in an automotive troika provided that GM comes to the party without financial baggage.

Related Reading –Brain Drain: GM Whacks Engineers

I first mentioned in October 2006 that Opel and Saturn would share a number of models and followed that up with numerous articles explaining the European origin of the Aura and Astra as well as the Saturn Sky making its way across the pond as Opels. Later, GM announced that by model year 2014 the two brands would be virtually seamless with most products shared (save for the Saturn Outlook crossover).

Opel’s Future Is In Doubt

Now that GM has apparently decided to kill off or sell Saturn, those plans have been canceled. Moreover, with GM looking to spin Opel off (or at least a share of its European brand), Opel’s future is in question as well.

Naturally, much of what is being aired as “news” lately is based on speculation, some of it coming from industry analysts with a healthy dose being suggested by GM itself: Better to make the news yourself than have the press constantly define your company by suggesting its impending demise.

Opel and Buick, Perfect Together?

The rumor du jour is that Buick and Opel will now begin to share some products, beginning as early as this year when the Opel Insignia hits our shores — not as the next generation Saturn Aura as was originally planned but as the revived Buick Regal. That shouldn’t come as much of a surprise as GM needs to fill its Buick-Pontiac-GMC stable with fresh models, something Opel can help do for it.

Buick is in the midst of a radical overhaul which began when the beautiful Enclave crossover was added to the fleet last year. Its LaCrosse sedan, the smaller of two sedans (the aged Lucerne being the other model) will be updated and replaced by a model now being sold in China, the brand’s largest market. The Regal would occupy the slot directly below the LaCrosse.

Opel isn’t likely to supply the Lucerne replacement as that car is much larger than anything the German brand now builds. Sharing the platform which powers the Cadillac DTS, the Buick Lucerne will most likely get a detuned version of the model GM says will replace both the Cadillac STS and DTS. The last we heard about that is GM is planning a front wheel drive model for it sometime around 2011 (why they won’t stretch the popular CTS’ platform to create this model is a mystery to me).

Orphaned Saturn To Buick Too?

If Saturn isn’t sold and their current product line with it, what will happen to its models? Well, the Aura and Astra would die as they are Opel transplants while the Sky would probably be discontinued as GM has no plans to continue with it or its sibling the Pontiac Solstice. The Outlook is already being sold as the GMC Acadia and Buick Enclave so unless GM loses its minds and decides that it should become a Pontiac, then we can kiss that model good-bye too.

That leaves the VUE which could be the perfect entry level crossover for Buick. With the Enclave serving on the upper end and the Vue on the lower end, Buick would have the two crossover models it needs going forward. As far as sedans go, the Lucerne, LaCrosse and Regal would fill out the Buick line as we know that going forward those two body styles will power the fleet.

Of course, coupe enthusiasts such as yours truly are imagining that the Buick Grand National could one day make its return, a two door sport coupe sitting on the Insignia-Regal platform.

Dream on!

I mentioned back in October 2006 that Saturn and Opel would eventually integrate most of their model lines. That plan has Saturn and Opel selling virtually the same models with one or two American GM products included in the Saturn line up (Saturn Outlook, for one).

Some of the smaller Opel models weren’t originally being considered, but with gas prices surging a noted automotive analyst, Jim Hall, says that Saturn would be served well by selling the Opel Meriva, a mini minivan as one of its base models.

Though it can “only” seat five passengers, the Meriva is slightly smaller than the Scion xB and is built on the Corsa platform. The Meriva measures just 159.4 inches long, 8 inches shorter than a Scion xB. The Corsa is expected to be the future base model for Saturn, replacing the current Astra.

Peter M. De Lorenzo, who authored The United States of Toyota, is contending that GM should get rid of Saturn altogether. Besides outlining that GM should be trimmed back to roughly two brands, Cadillac and Chevrolet, De Lorenzo believes that Saturn’s current lackluster sales is indicative of the company’s “too many models-too many divisions-too many dealers” set up.

Though De Lorenzo’s suggestions aren’t likely to be heeded, the marriage of Saturn and Opel could save the company cash as at least two brands are tasked with the responsibility of sharing their products. Whether consumers are attracted to a model like the Meriva remains to be seen, but with high gas prices a long term reality a Saturn Meriva does make sense.

General Motors has made it quite clear that the future of its Saturn brand is tied directly to its Opel brand. Opel is General Motor’s strongest European nameplate, having been part of the GM fold for nearly 80 years.

Saturn isn’t quite that old, about two decades in fact, and it is no longer a wholly owned subsidiary of GM. Instead, Saturn is part of GM’s brand line up much as Cadillac, Buick, Pontiac, and Chevrolet are as well.

Yet, unlike its other divisions, GM is still trying to maintain a distinct identity for its Saturn model line. By offering virtually the same cars Opel sells in Europe as Saturn vehicles, GM is managing to pull this off — with varying degrees of success.

The AURA represents GM’s second attempt at fielding a midsize car for Saturn, following on the heels of its lackluster L-Series. Although the AURA has received plenty of praise from automotive critics it, too, has been a sales disappointment for Saturn.

The Opel Insignia likely represents what the next generation AURA will look like. GM took the wraps off of the Insignia this past week, distributing exterior photographs of the sedan. The Insignia is larger and much more stylish than the Vectra, the car it is replacing, and it will offer all wheel drive.

In the European market, the Insignia will be offered in three body styles — hatchback, sedan, and wagon. Stateside, the sedan may be the only style offered.

The Insignia’s public debut will take place on July 22nd, for the London Motor Show, with the model in European showrooms this November. Look for the second generation AURA to debut as a 2010 model about one year later.