Opel to revamp Russian operations as demand slows down

Article by Christian Andrei, on September 18, 2014

Opel plans to revamp its operations in Russia as it tries to make through with the difficult market conditions in the country. Opel intends to cut production at its St. Petersburg site to one shift while making the plant work for just 16 days from August to October.

A spokesman for Opel in Ruesselsheim said in an e-mail response to Reuters that the site – which builds the Opel Astra and Chevrolet Cruze -- was only online for four days in August, and will operate for only four days this month and eight days in October.

As part of the revamp, GM has named procurement specialist Susanna Webber as GM Russia president, effective immediately. She will be in charge of speeding up local parts sourcing at St. Petersburg site to around 60 percent to help relieve cost pressures.

Replacing her as Opel board member for purchasing and supply chain is Katherine Worthen. Webber’s predecessor, Andy Dunstan, will take on a new role of vice president of sales and aftersales for Russia.

Opel’s reorganization plan also entails offering voluntary severance packages to a fourth of the site’s 2,000-strong workforce staff. GM has seen sales of its three brands – Opel, Chevrolet and Cadillac – drop 24 percent to 125,317 units in the first eight months of 2014 in Russia, according to data from the Association of European Businesses.

The drop meant a fall in their combined market, which was at 7.9 percent in the first eight months of 2014, compared to 9.2 percent in the same period last year.

Opel chief executive Karl-Thomas Neumann said in a statement that while the company believes in the long-term potential of Russia, there is “significant immediate pressure” on sales volumes and pricing while the Russian ruble is decreasing in value. He said that to offset the impact of the situation in Russia, Opel is taking measures to limit its risk and stay on course. [source: Reuters.com]

Topics: opel, russia

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