Opel management to present turnaround plan to board on Thursday

Article by Anita Panait, on June 28, 2012

The management of Opel is expected to present a far-reaching turnaround plan to the carmaker’s board on June 28. The turnaround is expected to encompass everything related to Opel’s turnaround like model strategy and brand positioning to new export markets, but may exclude the issue of job cuts in Germany.

The chief executive of Opel parent General Motors, Dan Akerson, is aiming to stop the unit’s loss-making ways by cutting its fixed-cost base and operating each plant at maximum capacity on a three-shift basis. Analysts, however, said the scenario could be only possible if GM closes at least one of Opel’s six plants. The plan calls for the closure of Opel’s Bochum site in 2017, resulting in a halt of investment spending at the plant.

GM is seen to shift some production of Opel units and possibly even Chevrolets cars to Europe from Korea to improve capacity utilization as well as appease local workers.

Opel and its sister brand Vauxhall have been the cause of a major headache for GM for the past three years, as the units contributed a lot to the carmaker’s approximately $3.5 billion in operating losses in Europe. Much worse, the current economic situation in Europe cuts hope for any positive growth in the continent. Company officials have been stifling hopes that the board meeting might provide a catalyst for the stock.

GM Chief Financial Officer and Opel board member Dan Ammann told Reuters Monday that the public should expect a continual series of actions over time.

Topics: opel

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