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(Bloomberg) -- General Motors Co. has lost money in Europe every year since 1999. After three years at the helm, Chief Executive Officer Mary Barra has had enough.

Pulling off a deal to sell the Opel division to France’s PSA Group, which owns Peugeot, will prove a deep-seated obsession with being the biggest is long gone, as GM will likely drop outside the top three among the world’s biggest automakers. It also will demonstrate Barra, a company lifer, isn’t wedded to the past.

“Kudos to her for making the right decision,” said Maryann Keller, an independent auto industry consultant in Stamford, Connecticut, and a longtime critic of GM’s management. “Opel hasn’t made money in decades. This flies in the face of the cliches we’ve always heard that you have to be in Europe and have German engineering to be a global carmaker.”

Since leaving bankruptcy in 2009, Detroit-based GM has lost about $9.1 billion in Europe. The automaker racked up losses of a similar magnitude in the decade leading up to bankruptcy. Management struggled for years to stem the red ink in a market where the automaker lacks a reputable luxury brand or leading position in any particular country, suggesting there was no obvious way to render the business a reliable profit contributor.

An exit from Europe would be the most significant yet under Barra and GM President Dan Ammann to drop money-losing businesses and concentrate on markets that generate profits. It started in 2015, when GM shuttered production in Thailand and Indonesia, where Ammann said the company posted poor results and didn’t have a clear path for improvement.

That same year, GM largely abandoned Russia, which was reeling amid political turmoil and a sinking economy. It was a bold move considering the Renault SA-Nissan Motor Co. alliance and Ford Motor Co. both were expanding there. GM appeared to be waving a white flag when others were staying the course.

Moving On

At the time, Ammann said GM was “perfectly willing” to “make the tough decision and move on” if there wasn’t a good business case for the company to invest.

Selling the Opel division, which also operates a U.K. sister brand Vauxhall, would be far more significant than leaving Russia, where GM sold just 189,000 cars in 2014 before deciding to pull out. The company delivered 1.2 million vehicles in Europe last year.

Read more: Why GM wants to sell Opel after 90 years: QuickTake Q&A

Hiving off Opel would render GM a seller of fewer than 9 million cars annually worldwide, after years of approaching the 10 million-unit threshold crossed by Toyota Motor Corp. and Volkswagen AG. GM probably would fall behind the Renault-Nissan alliance, which now includes Mitsubishi Motors Corp. in its global tally.

“This is a big market to exit, so they would not be a truly global automaker,” said David Whiston, an auto analyst with Morningstar Inc. “But this is indicative of the new GM that really wants to focus on returns.”

North America First

Exiting Europe also would signal Barra is more interested in investing in North America, where it derives most of its profits, and in China, where GM is seeing its fastest growth.

GM sold 3.9 million cars and trucks in China last year, an increase of 7 percent from 2015. Management sees that market as the best way to achieve economies of scale for many models. It’s also profitable: GM’s joint ventures in the country earned nearly $2 billion in equity income last year.

Barra has said she’s most focused on posting strong profits. Even with its North America business slipping a bit in the fourth quarter, GM reported a record return on invested capital of 28.9 percent last year. Adjusted earnings before interest and taxes climbed to a record $12.5 billion.

“This is a very different company, one that is more focused and more disciplined,” Barra told analysts at a January conference in Detroit. “We have changed from a culture that once was a best-efforts company to a culture that is accountable for delivering results.”

Opel’s Past

Barra isn’t the first GM executive to try to dump Opel, which the company has controlled for almost 90 years. In 2009, former CEO Fritz Henderson had an agreement with Canadian auto-parts maker Magna International Inc. to sell a majority stake. The board backed out of the deal, reckoning GM needed a presence in Europe, both to be truly global and to have the scale to defray the massive costs of investing in new models and technology.

The trouble is, GM sells mostly to Europe’s crowded mass market, where price competition keeps margins thin. Cadillac’s volumes are limited, so the company doesn’t have a luxury business to generate fatter margins like Volkswagen, BMW AG and Daimler AG. GM also lacks a captive home audience like PSA and Renault, which rely on big market share in France to keep profits afloat. Ford has a very profitable commercial-truck business that contributes to its bottom line.

These deficiencies help explain why GM was constantly restructuring. It took the company two years and $841 million in buyouts and other costs to close a plant in Bochum, Germany, in 2014.

GM expected to be on its way to making money in Europe last year for the first time since the late 1990s. Then U.K. voters’ decision to leave the European Union sent the pound plummeting, hitting GM’s earnings to the tune of about $300 million and resulting in an annual loss of $257 million.

“Finally,” Keller said, “GM is making smart decisions. If you lose money on cars, stop building them.”

To contact the reporter on this story: David Welch in Southfield, Michigan, at dwelch12@bloomberg.net.

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Melinda Grenier, Anne Riley

©2017 Bloomberg L.P.

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