Karl-Thomas Neumann, the new CEO of Opel, is confident that with funding from parent General Motors, the European brand will be able to cut its losses and will be on the road to recovery. At the recently held Geneva auto show, Neumann said that they have a 10-year plan and a new leadership and now, with the aid of GM’s financing, it can cover its losses as well as invest billions of euros into a new product.
Neumann became the new Opel CEO effective March 1. He said that he accepted the responsibility because he believed that GM was committed to investing in the revival of Opel.
GM CEO Dan Akerson has been saying that GM has the capability of reviving Opel and that GM doesn’t plan to sell the subsidiary, which the company almost did in 2009. Even so, there were persistent rumors that GM will offer Opel to another company or to merge it in a joint venture with a company such as PSA Peugeot Citroen or Fiat.
Neumann has experienced being the boss of Volkswagen China and as the CEO of supplier Continental AG. He was the replacement of GM Vice Chairman Steve Girsky, who was interim CEO. GM has made progress with Opel’s restructuring by appointing Neumann and entering new deal with the unions in Germany.
Neumann cited three priorities. The first is to present new models. By 2016, Opel will have launched 23 new or redesigned models. It has recently added the Adam minicar and the Opel Mokka, which uses the same platform as the Buick Encore, to its lineup. Its second priority is to reduce costs.
Last month, GM agreed with labor leaders about its plans to cut expenses and minimize unused capacity, specifically in Germany. Unions have said that they will allow GM to close its plant in Bochum, Germany, at the end of 2016. Around 3,300 employees work at the plant, where the Zafira minivan is built. In addition, labor leaders agreed to a wage freeze through 2016 for over 20,000 of Opel's German workers.
In return, GM said that no one will be terminated during this period. Girsky declined to provide a figure on the savings from the new deal. However, it said that it will assist GM to reach its target of breaking even in Europe by the middle of the decade. Its third priority is to change the culture within Opel, hinting that complacency within the company has pulled it down.