DETROIT -- To get General Motors Co. firing on all cylinders, CEO Daniel Akerson needs to fix Opel/Vauxhall.
But the sputtering European unit has in the past been affected by short-term financing problems at the parent company, leaving Opel without a clear road map to profitability, people familiar with the company say.
Opel remains a high-cost player in a low-growth region, in a segment hit by cutthroat competition, leading to speculation of a sale or labor concessions. However, neither a sale or a quick fix to return to sustained profitable growth are easily achievable, analysts and experts say.
"GM is frustrated with Opel's turnaround," said a person familiar with the matter who asked not to be identified. "Opel has been a challenge for years.
"Europe is hard," another person familiar with the industry said. "There are so many structural impediments in the auto sector, which is so tied into cultural, media and 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."
Akerson, an executive with a background in private equity, faces the challenge of running a large industrial company, where decisions are closely watched.
On the one hand, GM faces political resistance to plant closures and job cuts. Growth is also limited by a reluctance to expand Opel's geographic footprint on fears the brand is too regional and would cannibalize market share gleaned by other established brands within GM.
The U.S. automaker dropped plans to sell Opel in 2009 after months of negotiations and embarked on a drastic restructuring to get the unit, which lost $1.6 billion last year, back on track.
GM filed for bankruptcy in 2009 after the U.S. housing downturn and a spike in gasoline prices the year before caused consumers to turn away from its high-profit but fuel-hungry trucks and SUVs.
It emerged 40 days later thanks to a $52 billion U.S. taxpayer-funded bailout and in its restructuring dumped four brands in a move to focus more on Chevrolet and Cadillac. GM's sales have since rebounded in its home North American market and profits are strong in China, but Opel remains an unprofitable thorn in its side.
Akerson has never been much of an Opel fan. He was one of only two GM board members in late 2009 to vote against keeping it, believing Europe was a market of national champion automakers -- Volkswagen AG in Germany, Fiat S.p.A. in Italy and Renault SA in France -- and pan-European luxury brands like BMW AG and Daimler AG's Mercedes-Benz, a person familiar with Akerson's thinking said.
Opel is neither and Akerson believed it would be a long, uphill battle to fix it.
Opel's not a global brand
At last week's shareholder meeting in Detroit, Akerson was clear where Opel stood.
"We're going to try to define a slightly different brand and product strategy by having a global premium brand, Cadillac, and a global value brand, Chevrolet," he said.
"Then we will flank those two global brands with regional brands such as Opel/Vauxhall," he added. "That would be a brief outline of what I think we need to focus on over the next three to five years."
That is a hard pill to swallow for Opel executives who believe their company could be a global brand.
"There has always been inside of Opel a little independent streak," said the first person familiar with GM. "It's Germans thinking Americans don't know what the hell they are doing."