GM's European unit to build Buicks for U.S. market

Sun Jan 11, 2015 5:45pm EST
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By Edward Taylor

(Reuters) - General Motors is giving its German Opel unit a new job -build Buick models to sell in the United States as part of a strategy to make good on Chief Executive Officer Mary Barra’s promise to make money in Europe by 2016.

With the European economy sliding again, and the Russian market - GM Europe's third biggest behind Britain and Germany - in a deep freeze, Opel's factories have in recent years been running at about 70 percent capacity.

However, Europe's woes give Opel a new edge: The falling euro makes exporting cars to the U.S. market more attractive.

GM on Sunday will formally announce plans to build a version of the Opel Cascada in Gliwice, Poland for sale as the Buick Cascada in the United States. Although Poland is not part of the euro zone, the announcement, ahead of the Detroit auto show, is a sign of things to come.

Opel has said it will make a crossover vehicle at its factory in Ruesselsheim, Germany to replace the Zafira people carrier. The company has also said Ruesselsheim will build a future Buick model for sale in the United States during the second half of this decade, an Opel spokesman said.

Opel and Buick are already making cars on the same platform. The Buick Regal and the Buick Encore share their underpinnings with the Opel Insignia and Mokka models.

"We are able to reach better economies of scale in engineering and manufacturing by sharing vehicle architectures where it makes sense," the Opel spokesman said.

Barra and Opel chief Karl-Thomas Neumann are working on a three-stage plan, known internally as DRIVE!2022, to introduce new engines and transmissions, and a new family of cars such as the Adam, the Cascada cabriolet and an Insignia.   Continued...

General Motors CEO Mary Barra holds a media briefing before the start of GM's Annual Shareholders Meeting at the GM World Headquarters in Detroit June 10, 2014.  REUTERS/Rebecca Cook