Opel: Capacity Glut? Us? No Way!

Bertel Schmitt
by Bertel Schmitt

Germany’s Chancellor Angela Merkel made appreciative noises o ver the 4 billion EUR GM wants to invest into Opel through 2016, but gave no indication that she is willing to chip in.

Comments from Germany quickly pointed out that the 4 billion earmarked for Opel are chump change compared to the 50 billion Euro budgeted by Volkswagen for the next three years. The development of one car alone costs in the neighborhood of a billion EUR. Observers surmised that the 4 billion are not on top, but what Opel has to invest anyway to keep halfway alive. According to Bloomberg, “the new spending will focus on developing 23 vehicles and 13 engines to reach a goal of breaking even in Europe by mid- decade.” 4 billion barely cover a fifth of that plan.

In the meantime, Opel denied rumors that workers are twiddling thumbs at its factories. For months, German media claimed that Opel factories are running at 50 to 60 percent of capacity. Not true, Opel production chief Peter Thom told Reuters. He said that Opel is running at 70 percent capacity in three-shift operation. “In two-shift operation, utilization is around 100 percent,” he told Reuters on Wednesday.

If that is true Opel would have not capacity problem at all. Anything above 80 percent capacity utilization is considered ideal, and three shift operations usually are not desirable.

Bertel Schmitt
Bertel Schmitt

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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 4 comments
  • Summicron Summicron on Apr 12, 2013

    Wir sind Leichen

  • Lorenzo Lorenzo on Apr 12, 2013

    If they don't have a capacity problem, and they're selling all the cars they make, a neat trick with sales dropping, they must be losing money on each car sold, and can't raise prices in a weak market. How are developing 23 vehicles and 13 new engines going to fix that?

  • HerrKaLeun HerrKaLeun on Apr 12, 2013

    23 vehicles or they only plan to sell 23 cars? I'm not an Opel expert, but they maybe have 5 or 6 vehicles at best (not counting re-badged Vauxhall). VW with all its brands barely has 23 vehicles if you exclude the luxury and commercial kind. Unless each trim level is a new vehicle....

  • Cargogh Cargogh on Apr 12, 2013

    Some of those 23 vehicles must be scooters.

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