We’ll see about the promise to return Opel Vauxhall to profitability by mid-decade.
While the dropping of Chevrolet as a mainstream brand in Eastern and Western Europe by 2016 is a good strategic move for GM, the exit cost will be expensive to shareholders in the short run. GM estimates that it will take special charges of $700 million to $1 billion primarily in Q4 of 2013 and continuing through the first half of 2014. In addition, GM expects to incur addition exit costs related to these actions that will not be treated as special charges, but will negatively affect GM International Operations earnings in 2014.
The special charges include asset impairments, dealer restructuring, sales incentives and severance-related costs. GM says it help produce continued improvement in GM’s European operations through the further strengthening of the Opel and Vauxhall brands. Approximately $300 million of the net special charges will be non-cash expenses.
