If a report from German newspaper Handelsblatt published on Tuesday rings true, General Motors walked away from a serious financial mess. The newspaper reported that Opel lost over $1.24 billion in 2017.

The figure far overshoots Opel’s last yearly performance under GM, when Opel and Vauxhall lost $257 million in 2016. Both brands were supposedly on the mend under a turnaround plan championed by former Opel CEO Karl-Thomas Neumann and GM CEO Mary Barra. The brands lost $813 million under GM ownership in 2015, and the business failed to turn a profit for 19 years.

Opel and PSA Groupe vehemently denied the report and said, “This figure doesn’t exist inside Opel/Vauxhall, as it is not available.” PSA will reportedly announce 2017 earnings during a March 1 conference.

The potential losses back up Opel’s shrinking sales in Europe. Despite seven new vehicle launches, Opel sales dropped 5 percent last year. In contrast, the European auto market grew by 3.3 percent. GM reported a 2017 EBIT (earnings before interest and tax) of $12.8 billion for last year, but registered a net loss of $3.9 billion. The loss comes from a substantial charge of $6.2 billion surrounding the Opel and Vauxhall sale.

Still, the move could be a long-term victory for GM if Opel is, indeed, hemorrhaging cash. PSA CEO Carlos Tavares unveiled Opel’s turnaround plans last year and will target a 2 percent operating margin by 2020, and a 6 percent operating margin by 2026. Tavares insisted the Opel acquisition will unlock greater economies of scale and produce healthy synergies between the brands.

 

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