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Opel May Not Crash and Burn After All

GM's European division is predicted to have a solid 2015.

There have been hard times at Opel lately. In fact, GM’s long-running European division hasn’t made a profit in some time. There was even talk during GM’s bankruptcy of selling the brand. Right now, Morgan Stanley estimates that GM Europe as a whole to be worth about negative $11.5 billion. Yes, you read that correctly. In 2012 alone, Opel-Vauxhall lost $1.8 billion, and this past year it looks like another $837 million was lost.

But GM has been working on a long-term solution to this major money-losing problem, and investment banks are taking notice. A Morgan Stanley analyst is forecasting Opel’s "revenues to stagnate from roughly $20.1 billion in 2013 to $20.4 billion by 2017...a growth revenue at between 1 and 1.5 percent through 2021." In other words, it’s predicted that Opel will turn a profit in 2015. So what has GM done to generate this positive news? It restructured its European operations in recent months, and announced last year a $5.25 billion plan to develop 23 new models and 13 new engines by 2016. Best of luck, Opel. We believe in you and would hate to see you go.

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