Opel/Vauxhall turnaround plan approved by supervisory board

Article by Christian A., on July 2, 2012

Opel/Vauxhall will be following a midterm business plan that will bring the company back to sustainable profitability. This plan was recently approved by its supervisory board. Under this plan, the division will invest in new products and will use a new branding strategy. In the statement, GM Vice Chairman Stephen Girsky said that this plan clears the path for Opel to have a “strong future.”

He also said that GM is supporting Opel and its management and labor. Girsky leads Opel’s board, which is evenly split up evenly between GM representatives and elected delegates from the more than 40,000 workers at Opel and Vauxhall, its UK sister brand.

Covering a four-year-period until the end of 2016, this business plan entails "massive" investments in the product lineup, an increase in exports, reductions in material, engineering and development costs as well as additional savings from GM's alliance with PSA/Peugeot-Citroen.

It didn’t provide concrete details. Opel also didn’t say when it expects to be profitable again. Notably, the company’s underlying operating loss decreased in 2011 to $747 million from $1.95 billion in 2010. Opel's top labor leader, Wolfgang Schaefer-Klug, said that the GM’s support demonstrates the importance of European engineering and the European sites of Opel and Vauxhall.

Opel didn’t give additional details about its new brand strategy. However, Automotive News Europe Congress talked to Opel CEO Karl-Friedrich Stracke last week. He said that the brand will adjust the prices of its cars so that they’re more affordable to the traditional mass-market customer base.

In addition, Stracke said that this unit won’t cut investments in new products even with Europe's debt crisis. Last May, Opel said that it will invest about 11 billion euros through 2014 in new models like the Mokka subcompact SUV, Astra sedan, an Astra-based convertible and the Adam minicar.

Topics: opel, vauxhall

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