By on December 15, 2011

Without Opel, GM might not be the world’s largest automaker. But it would be a highly profitable automaker. Opel will cost GM approximately € 1 billion ($1.3 billion) in the coming year and will miss its restructuring plan. Reason for the shortfall: Opel will sell only 1.4 million cars next year, 100,000 less than budgeted. How do we know this? We don’t, but it is in an internal forecast of Opel. The document somehow came into the hands of the German magazine Capital.

Capital most likely did not find the document in a Rüsselsheim dumpster. The bad news look like yet another targeted leak, aimed at scaring the unions into compliance with more job cuts.

By the end of January, GM wants to see a business plan that shows how Opel will become profitable. Capital heard that Opel CEO Karl-Friedrich Stracke is working on an austerity program. Included in the plan are cheaper materials, suppliers that make cost concessions, increased outsourcing, serious cuts in R&D expenditures.

The magazine thinks that the days of the Opel plant in Bochum and the Vauxhall site in Ellesmere port are numbered.

The unions, which have it in writing that there will be no firings or plant closures at least until 2014, will fight the plans vigorously.  A strike is possible if Opel breaks the contract. That would be one way to make fewer cars.

 

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23 Comments on “Internal Paper Predicts Massive Red Ink At Opel...”


  • avatar
    HerrKaLeun

    “Stracke is working on an austerity program.”

    i had an Opel Corsa in the 1990′s when they had austerity programs. worst car ever, was in the shop during the 3-year warranty every month. i had no choice but to sell t before warranty was over.

    It was like a German car int he US, except thsi is supposed to be an economy car. I see a BMW buyer ponying up thousands of $ in repairs since they cross-shop with Porsche etc. But an Opel buyer cross-shops with toyota et al.

    • 0 avatar
      gslippy

      “Included in the plan are cheaper materials, suppliers that make cost concessions, increased outsourcing, serious cuts in R&D expenditures.”

      They surely won’t mention this to the first customer in the door looking at the newly-decontented Opels.

  • avatar
    zerocred

    Ah, those Germans, always kidding around. Count the fingers on the fist drawn on that sign.

  • avatar
    cmoibenlepro

    I learned that Germans have actually 6 fingers.

  • avatar
    GS650G

    Are their any Russian mobsters around that can help the financials here?

    • 0 avatar
      forraymond

      I think the criminals might just be in Detroit. Opel may just be paying for (on paper) a whole lot more than Opel. They designed just about every car in the Buick sells. They engineered or re-engineered many others. I do not see how they could be doing so badly. It is fishy to me.

      GM wants then gone, this may be their way of doing it. Kinda like conservative politicians trying to kill public education in America by cutting funds and then saying schools are doing a bad job.

      • 0 avatar
        GS650G

        GM wants out of the worker’s paradise that is Europe.

        As to conservative politicians killing schools with budget cuts, let me know when that actually happens for real.

  • avatar
    jhott997

    Wait a second here!!! I thought GM was “out of the woods” with “clear sailing ahead”?
    Were not the cleansing effects of bankruptcy supposed to address all of these inconvenient business case and excess capacity issues?

    Wonder what blog will start a “GM Death Watch II: The Break-Up Years”?

  • avatar
    photog02

    What will be the effects of this austerity program on GM’s other vehicles? It seems like so many cars GM sells in America are based on Opel products. If they cheapen the Opel line through reductions in R&D, will it lower the competitiveness of their current US line?

  • avatar
    Robbie

    As long as so many of GM’s offerings worldwide consist of vehicles designed by Opel, it is not clear to me whether Opel’s losses are not simply a GM accounting gimmick to pressure the unions. Is there a financial expert here who can shed light on this?

    • 0 avatar
      vaujot

      I share that suspicion. I wouldn’t be surprised if the engineering staff in Ruesselsheim is all on Opel’s payroll yet their work product is used by GM worldwide and the IP is with GM.

  • avatar

    typical GM, cut, chop, and close…characteristics of a company that doesn’t have a clue how to sell.

  • avatar
    gslippy

    “By the end of January, GM wants to see a business plan that shows how Opel will become profitable.”

    Well, that’s a novelty at GM. Here’s a free hint: Don’t produce a single Ampera. It’s a known money-loser.

  • avatar
    redav

    The strategy is interesting–make your company look bad to save some money as opposed to making it look good to sell more cars and hit your targets.

    Maybe it’s just me, but I don’t think any company will be successful long-term with those methods.

    • 0 avatar

      that strategy woked in the US where Red Ink Rick intentionally bankrupted the compnany after stripping the asset shelf. he got away with it because the union was complicit. German unions are not so easy to corrupt.


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