By on December 21, 2011

Ever since Steve Girsky an his “merry band of hatchet men” touched down in Rüsselsheim, Bertel has been warning that GM’s European division was about to embark on a serious cutting binge. But our worst fears, namely that Opel could go away entirely, have yet to be realized. Instead it seems that self-destructive mutilation will be attempted first, in order to stem the gushing red ink at Opel where at least €1b in losses are expected next year. Automotive News Europe [sub] reports that the first round of cuts will hit Opel’s Internationalen Technischen Entwicklungszentrum (ITEZ, “International Technical Development Center), as an IG Metall union document foresees some 1,420 product development position cuts (from a staff of some 6,000).

Opel’s spokesfolks insist that the union’s numbers are “factually wrong and excessively high,” but only, in the words of ANE, because they “include people who are not on Opel’s payroll – like employees of service providers and supplier employees.” Furthermore, the automaker has not offered an alternative number for the expected cuts, and given the close cooperation between unions and OEMs in Germany, not to mention the detail of the IG Metall leak (200 employees will be offered severance payments when 550 positions are transferred to the manufacturing engineering department from product engineering), it’s tough not to conclude that the number is fairly close to GM’s actual plans.

And the cuts aren’t limited to workers: a battery-powered version of Opel’s forthcoming “Junior”/”Allegra” city car, as well as a long-rumored Insignia-based Coupe are said to be on the chopping block as well… so let go of any plans to wait for a reborn Buick Riviera. Oh, and don’t hold out any hope for the “production potential” Opel recently touted for its strange, low-cost RAK e Concept. Meanwhile, here are the other measures that Opel admits are coming down the pike:

• Stronger concentration on the carmaker’s core development mission and a reduction in project coordination tasks

• Increased use of modules and construction kits. “For example, we still have too many steering and seating systems. We have to improve significantly here,” the spokesman said.

• Deeper and earlier integration of suppliers. “There are no plans to put a stranglehold on our suppliers — we need to increasingly rely on suppliers’ innovative strengths,” the spokesman said.

In short, it seems that in order to save Opel, GM has to kill off much of what made Opel so valuable to it, namely its ability to develop premium global vehicles for the parent company. Instead it seems Opel will be forced to concentrate on selling into a brutal European market that seems set to contract as the Euro crisis drags on. Perhaps there is some truth to the rumors that Chevrolet will slowly replace Opel after all.

After all, cutting engineer positions is certainly the low-hanging fruit in Opel’s restructuring, but GM will likely have to go after assembly capacity (likely at Bochum and Port Ellesmere) in order to address the overcapacity issues that are at the heart of its (and many European automakers’) woes. That could create problems though, as this latest union leak confirms that Opel’s labor councils are prepared to fight. Opel’s outgoing union leader Klaus Franz has gone so far as to ask GM to sell Opel to its Chinese partner SAIC, a move widely considered a sign that Franz was trying to move back in touch with an increasingly militant union rank-and-file in the face of his own legal problems. While Franz portrays himself as the victim of a media smear campaign and threatens legal action against the Frankfurter Allgemeine Zeitung, his union appears prepared to fight the seemingly inevitable production cuts. And all this as Opel celebrates its 150th birthday.

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9 Comments on “Opel Turns 150, Commences Cutting...”


  • avatar
    acuraandy

    The company I work for (used to) own a Buick dealership and in the mid to late 1960’s also sold Opel. Mainly Kadetts I think.

    It is with extreme irony that Europe, who is often touted as ‘a decade ahead of the curve’, is now faced with what the US/Canada market is/was the past decade; too many marques and too few buyers.

    Opel is screwed. Hopefully GM more humanely euthanizes them than they did Saab; effizienter zu gestalten. das ist das Deutsch so.

    • 0 avatar
      dejal1

      “Hopefully GM more humanely euthanizes them than they did Saab”.
      They did it humanely. They sold the company and people had jobs (for awhile). It isn’t their fault that the buyers couldn’t make a go of it. GM was supposed to owner finance the deal? Also, it isn’t their fault that the buyers were hooked up with con-artists.

      By the way, Rachel Pang is in Sweden. Looks damn good for someone who was on deaths door last weekend , half a world away.

      Keep the engineers. Open a design center, dump the rest. Do you pull the bandage off slow or fast? It is going to hurt one way or the other with probably the same outcome.

      If they have to lose a billion Euros next year anyways, and maybe the next year and next year….., they should cut their loses now. Probably cost them a fortune to do it, but it’s going to cost that anyways.

  • avatar
    mike978

    Interesting and Ed may be right that “In short, it seems that in order to save Opel, GM has to kill off much of what made Opel so valuable to it, namely its ability to develop premium global vehicles for the parent company.”
    However some pruning may not hurt product development if they follow VW’s example as reported on TTAC recently :

    http://www.thetruthaboutcars.com/2011/12/born-from-kits-volkswagen-invents-the-incredible-money-machine/

    If they minimize steering assemblies etc then that saves money without necessarily reducing product development. Also they have pruned some niche products like the Insignia Coupe which saves resource. Time will tell if this a) actually happens and b) if it does, does it have a big negative effect on their engineering output.

  • avatar
    jpolicke

    Isn’t Vauxhall just a right hand drive Opel? How devoted is the UK market to the brand? I would think there were savings to be realized killing Vauxhall and just building RHD Opels for the wrong-side-of-the-road market.

    • 0 avatar
      stephenjmcn

      Long-term, there would be savings in doing this, but it would cost cash to do it immediately. It is the most literal kind of ‘re-badge’ you can get, there are no other vehicle differences whatsoever.

      Vauxhall in spite of their decent sales have rather a poor image, seen as boring, stodgy, fleet fodder. The cars are actually ok, if overweight and with powertrains that are now well behind the curve. Opel would undoubtedly have more cachet in the UK, as we seem to like everything else with a German badge on.

      Whatever they do, they need breakthrough products, they have nothing beyond almost-there cars in small, medium, and large sizes. No crossover, no coupe (I know there’s a 3 door Astra GTC, it doesn’t count). I can’t see how canning engineers and niche products will help here.

      • 0 avatar
        mike978

        Stephen – I don`t fully agree that they need “breakout cars” – Ford has a good reputation in the UK due to the decade plus of motoring magazines lauding the Focus and Mondeo for their driving dynamics. Vauxhall is catching up, but they are caught in the middle – with VW on one side offering quality/luxury and For don the other offering driving dynamics. What do you do as a third brand, and this question is relevant for all the other brands in the UK since Vauxhall is 2nd or 3rd currently. If they could nail one aspect (other than great rid/quiet which they are known for) then they could do well with current vehicles. Cars like the Meriva and Zafira have done them good – an Insignia coupe would not be a good business decision.

      • 0 avatar
        stephenjmcn

        Hi Mike, I see exactly what you’re saying, but therehas to be a product which changes and defines things for the brand. Ford only got the dynamics reputation with the 1998 Focus, see Clarkson’s review of its predecessor here http://www.youtube.com/watch?v=eB9ei46O1Ok&feature=youtube_gdata_player . Likewise, VW ‘wow’ interiors started with the 1996 Passat. Both of these are recent, which suggests it’s possible.

        What Vauxhall/Opel’s ‘thing’ might be is open to question, but cars like the Zafira might be a decent starting point.

  • avatar
    fincar1

    It’s the American way…can all them goddam engineers, they’re just a cost center. Get me a couple of good sales guys, we’ll move this metal.

  • avatar

    the globalist banksters own the central banks and control the industries and governments in most countries. their boy Girsky is on a seek and destroy mission. they want out of unionized production on the continent like they did stateside. they are rat bastards beholden to the buck and to hell with communities and societies.


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