#opel

It wasn’t our intention to inundate you with Buick stories, but sometimes the improbable occurs. Buick has been slowly revealing their new Encore crossover via their Facebook page, and we’ve now been treated to 3 out of 4 photos – enough to discern what the vehicle really looks like ( pretty close to what Ed’s photo revealed).

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).

Allegedly, GM wants to replace Opel and Vauxhall with Chevrolet in Europe, and turn the bow tie into a true global brand. Apparently, it wants to do this with a severely pruned-down dealer network. Chevy dealers in Germany watch every courier coming through the door with trepidation: Every fifth Chevy dealer in Germany will be handed a letter that tells him that his contract is being terminated, says Germany’s kfz-Betrieb.

As reason, insufficient sales are given. Uwe Heyman, a lawyer who manages the council of Opel and Chevrolet dealers in Germany, thinks the reason is likewise insufficient:

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.

The Volt’s battery woes are having an effect on its European sibling. Automotive News [sub] reports that Opel/Vauxhall will delay delivery of the Volt’s sister-model Ampera, while investigations by U.S. authorities into battery fires following government crash tests of the Volt continue. An Opel spokesman told AN:

Many years ago, an old school Volkswagen exec said to me: “If I want to have visions, I simply drink a few bottles more.”

How things have changed. Nowadays, if you want to be a CEO, you must have a vision. Winterkorn’s vision is world domination by 2018. His colleague Karl-Friedrich Stracke also has a brand new vision. According to Germany’s Focus Magazin, Stracke said at a meeting for the upper management:

For no immediately obvious reason, Germany’s Frankfurter Allgemeine Zeitung has a long article today, which says that GM is running out of patience fast with its money-hemorrhaging Opel unit. The paper predicts new negotiations (read firings and plant closures) with the unions – “or worse.” (Read good riddance Opel.) The sound of rattling sabers is all over the article.

Reuters reporter Ben Klayman, part of their stellar Detroit team, assisted by Christiaan Hetzner in Frankfurt, did a great piece about the grim options that await Steve Girsky and his merry band of hatchet men when they go over to Europe to whip Opel in shape. It could actually be the end of Opel instead of a glorious future, the report says.

“Options for restructuring Opel range from bad to worse and could include a form of bankruptcy, analysts and bankers say. Costs will have to be slashed further, steps that could include politically charged job cuts and plant closures in Europe. Girsky, who was named chairman of Opel’s supervisory board on Monday, could look for new partners for Opel to share costs, and even return to the idea of selling the brand once it has been repaired, analysts said.”

Adam Jonas, analyst at Morgan Stanley, Girsky’s former employer, says it best:

“You can’t say the words ‘all options are on the table, we rule out nothing’ unless there’s something fundamentally changing.”

Opel workers and managers are deeply worried: It’s not just cuts that are coming. GM is sending a team of feared slashers. Says the Wall Street Journal:

“Vice Chairman Steve Girsky, GM’s second-highest-ranking executive, will become chairman of the Opel supervisory board. Tim Lee, president of GM’s international operations, and financial chief Daniel Ammann also will join the Opel board, the company said.”

Supposedly, GM was surprised and appalled that the European business hit GM’s bottom line with an operative loss of $292 million in the third quarter, despite increased sales. I am not surprised at all. I have always warned that restructuring Opel and cutting jobs is an expensive exercise. And those costs were mostly delayed into the third quarter.

Now Girsky and his team of handpicked hatchet men are coming.

From his dream of a UAW-represented VW plant in Tennessee ( ha!) to his desire for a seat on the boards of the Detroit automakers ( double ha!), UAW President Bob King has a way of idealizing the German unions. And no wonder: while the UAW spent decades fostering a radical sense of entitlement, German works councils entwined themselves with their respective employers, earning places of power among the world’s largest automakers. But unions are a delicate balancing act in every country and culture, and even Germany’s unions, widely hailed as the example for the industry, can run into trouble.

Last time it was Volkswagen’s powerhouse works council, which erupted in a scandal over VW-funded sex tourism (with free Viagra and shopping trips for the wives!) back in 2005. With Opel’s union boss, Klaus Franz, becoming caught up in his own (slightly less lurid) scandal, GM’s acknowledgment that more cuts could be coming for Opel could prove just as explosive for the German works council model.

Reuters reports that GM Europe President Nick Reilly is retiring just as his successor predicts a slowdown the European auto market in the turmoil of the Euro crisis. Replacing Reilly is Opel’s CEO, Karl-Friedrich Stracke, who just last week told Automotive News [sub]

We expect that the automobile market in Europe will experience a painful cooling, and we expect a significant shrinking of the market.

And as if slow sales projections weren’t bad enough, Opel also faces a tough union boss in Klaus Franz, who is pushing for ever more production or not just Opels but Chevies as well, in the Euro zone according to AN [sub]. But despite the challenges facing Stracke, he’s still got a song in his heart… in the tune of GT. Though GM has no lightweight rear-drive platform to draw on, and in spite of all the gathering storm clouds, Stracke tells Auto Motor und Sport that

I can well imagine a car like the Manta, but with new technology and a new design. I could also very well imagine a proper Opel GT which recalls our classic model of 1968.

Ludicrous teasing? Possibly. An understandable escape from the depressing reality of mid-debt-crisis Europe? Definitely. I mean, what would you rather imagine, a cascading collapse of confidence in sovereign debt, or the scenario depicted above? Yeah, that’s what we thought…

Panoramic windscreens are something of a building trend in Europe’s premium-ish small car segments, combining the benefits of a sunroof with improved visibility. GM debuted the concept as a rarely-chosen option on the previous-generation Astra three-door, and it’s coming back with the forthcoming Astra GTC. Which raises an interesting question: since I’m convinced the GTC will come to the US as a Buick coupe, will this funky look come across the pond as well? Bob Lutz emphasized his preference for “glowering” low rooflines, telling TTAC that an early version of the forthcoming Cadillac ATS looked like “a kid with too large of a forehead” before he told designers to bring down the browline. Will an exception be made for this unique (to the US Market) feature on what should be one of GM’s most purely European cars? Or will Lutz’s aesthetic tastes doom GM buyers to observing traffic lights out of their side windows? Is this an option that other automakers should consider making available?

Aftre just one year on the market, Opel is ditching its Lifetime Warranty, says Das Autohaus in Germany. I don’t know how many new customers that braggadocious warranty got Opel, but it definitely got Opel into hot water. Everybody, from consumer advocates to Germany’s umbrella organization of the car business ZDK, was against it. Consumer advocates even brought suit.

Sex and money are known as the world’s biggest motivators. Volkswagen used sex to make its shop stewards cooperative. This ended in a huge scandal. Opel is using money instead. “The system is the same as formerly at Volkswagen – only without sex,” writes Germany’s Frankfurter Allgemeine Zeitung in a long article about “illegal bonus payments” to members of Opel’s works council.

Though the Chevrolet Spark has been in GM’s small-car spotlight this week, the firm’s Opel division is working hard on yet another tiny A-segment city car, tentatively known as the Junior or Allegra. Built on a shortened Opel Corsa platform, the Allegra will be a three-door, four-seat model targeted at the low end of the European market, at an estimated price of €10k. With a European debut targeted for the end of next year, Opel hopes to take the fight to the VW Up! And after it debuts, the smallest, cheapest Opel will become the home of an entirely new generation of small Opel-developed engines, with hybrid and EV versions rumored as well. Will it end up coming to the US as a Cadillac city car, as tipped by the recent ULC Concept? If gas prices go up, at least that option will be on the table…