From The Independent:
Opel-Vauxhall has registered its first profit in almost two decades under the new ownership of France’s PSA Group, the maker of Peugeot.
Opel-Vauxhall made €502m (£447m) operating profit in the six months of the year on revenues of €10bn, the first time the company has been in the black since 1999. The numbers mark a turnaround from a €257m loss in 2016, the last full year when the company was under General Motors’ ownership.
Most things in economics follow some sort of pattern, but it baffles me why its parent company General Motors would keep going through thick and thin for nearly twenty years.
Maybe the costs of shutting everything down would have cost more in the short term than just running up another year's loss, in the vague (but folorn) hope that things would turn around in a year or two, throwing good money after bad.
Or maybe GM were not doing the transfer pricing properly and over-booking profits in the USA and understating them in Europe? But it's not as if GM globally was overly profitable either, from Wiki:
In May 2013 during a commencement speech, CEO Dan Akerson suggested that GM was on the cusp of rejoining the S&P 500 index. GM was removed from the index as it approached bankruptcy in 2009.
Which is all a word of warning for anybody who dreams of going into car manufacturing*, you need real staying power and the ability soak up decades of losses while you make the leap to mass manufacturing and economies of scale. It's not like in the first half of the 20th century when there were dozens of small carmakers in every country, each grinding out a few hundred cars a year, they have all merged, been taken over or simply disappeared.
* Exactly the same thing happened with aircraft manufacturers (there were still 27 aircraft manufacturers in the UK in 1945), and the same thing has happened with internet/software businesses, only much more quickly.
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