Too Much Capacity, Too Little Sales, Too Late For Opel?
If GM’s Opel would have a jobs bank, its accounts would be bulging. Opel has far too much capacity for far too little sales. The situation at Opel “is more dramatic than thought,” writes Germany’s Focus Magazin. The magazine got is hands on confidential production plan (most likely leaked by interested parties,) and the numbers are horrific.
Capacity ultilization at Opel (Focus Magazine)
Ellesmere Port55%Luton57%Zaragoza59%Gliwice62%Rüsselsheim65%Eisenach66%Bochum77%Average63%Only 65 percent of the capacity in Rüsselsheim is utilized, the plan says. In some Opel factories there is even less work.
Opel wants to build one million cars in 2012, but has capacities for 1.6 million. This is a capacity utilization of 63 percent. If Opel sales continue on their downward trajectory, capacity utilization of 50 percent could become reality. In the business, capacity utilization below 80 percent is a sign for losing money.
Opel will have to close at least one plant in Europe, possibly two if the scale effect of the alliance with PSA are supposed to be realized. Through 2014, plant closures and firings are impossible, due to a contract with the unions. After 2014, plant closures and firings will cost a lot of money. The unions already threaten to withdraw their restructuring contribution of $340 million per year. “We won’t pay for our own funeral,” Opel’ s works council chief Rainer Einenkel to Focus. Careful, Walter: The restructuring contribution appears to be part of the contract that forbids plant closures …
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Wither Opel, wither GM. Germany has three superlative auto companies, Daimler, BMW, and Volkswagen/Porsche. And then there's Opel. Not in the same class as above but integral in designing GM products. Opel, can't live live it, can't live w/o it.
I remember paying $600 to change a slave cylinder in my Saturn Vue (made by Opel) because they had to drop a bell housing and a similar amount for a computer because they had to disassemble a dash. Europe in America was for me a disastrous experience. Sorry for the workers but I cannot work up a tear for Opel.
"Buick has literally becoming Opel US with its offerings" Oddly enough, I stopped by a GMC/Buick dealer today just to check out their latest offerings. I don't see a damn thing Buick makes that interests me. And from the lack of new Buicks on the road, others feel the same. Why did they save Buick over Saturn or Pontiac? Oh, that's right, China sales....
Saturn and Pontiacs were just badge jobs of Opels too. Get over it. And the G8 was not profitable, no matter what purists say. Same with Solstace. "But Pontiac was on a roll" Yeah to the grave. Purists go on and on about how "great" Europe is, but ignore the real problems over there. Always hear "GM should just import Opels", etc for decades. Well, look at the overcapacity. It should be Europe that bails out Opel/Vauxhall, it's their social issue of 'lifetime employment'. And don't think it will never happen to precious BMW/Benz/VW. They will send jobs away, to. Purists will just be glad 'my car was designed by Germans'. pffft