How Opel avoided a Saab-like demise and what its future might hold

Under General Motors' ownership, Opel/Vauxhall has been able to avoid the fate of former GM sibling Saab, which vanished after the brand was starved of product, by managing to compete in most segments. This was done despite its virtual lack of SUVs, which is ironic for a U.S.-owned brand.

With the notable exception of the Astra and Insignia, whose compact and midsize sedan architectures were developed at Opel's ITEZ engineering center in Ruesselsheim, Germany, the rest of its lineup was cobbled together through a hodgepodge of different platforms. The Corsa subcompact, its biggest seller, is still built off the same Fiat platform used by its predecessor, as is the Adam minicar. Other cars such as the Agila minivan and Antara SUV were badge-engineered copies of the Suzuki Splash and Chevrolet Captiva, respectively, and were discontinued because of poor sales.

Meanwhile, Europe's profitable commercial van segment was neglected until Opel CEO Karl-Thomas Neumann's arrival in 2013. He promptly assigned Steffen Raschig to improve the business, which he did. Pairing with PSA, which like Opel is very dependent on European sales, offers the opportunity to develop a full line of models that are tailored to local tastes and market requirements from the start, rather than constantly being forced into clumsy compromises.

Emissions struggles

A critical benefit for Opel would be PSA's expertise in developing small, fuel-efficient cars. A consistent criticism of Opel's lineup was the relatively high curb weight of its models, which are often 100 kg to 200 kg heavier than competitors' model. As a result, the company's EU fleet emissions trailed premium carmakers Daimler and BMW in 2015, the most recent year for which data is available. By comparison Peugeot and Citroen lead the pack with the lowest emissions.

Negative aspects of the deal largely revolve around fears of a mass cull of jobs and plants as PSA will have little need of more western European manufacturing capacity, especially in Germany, where Opel's Eisenach car factory or its Kaiserslautern powertrain plant could be closed once employment guarantees expire. Any closure could spark strikes across Opel's German operations.

The corporate governance track record for Franco-German corporations also has not been encouraging. Although the two countries are considered to be the engines behind European integration, France follows an aggressively interventionist industrial policy that protects domestic interests even at the cost of its closest ally. Critics say this has much to do with its economic model, where an elite control both private enterprise and state bureaucracy and the borders between the two are heavily blurred.

Airbus is perhaps the best example. The airplane maker is a prestige project between the two countries but tensions on the board simmered for years, prompting Daimler to remain a strategic shareholder longer than it would have liked at the behest of German Chancellor Angela Merkel. The German half of drugmaker Aventis steadily lost influence after Nicolas Sarkozy, then still an up-and-coming economics minister, played an instrumental role in creating a French champion, Sanofi-Aventis, out of a European one. These examples point to potential problems for an Opel under French control.