Prepare For Years Of Hemmorhage: Opel In No Hurry To Stop The Bleeding

If you are anxious to hear what Opel is going to do to stop the bleeding of money (just in case you are holding GM stock,) then you need a lot of patience. GM Europe CEO Karl-Friedrich Stracke thinks he might have a plan within two to three months. He might have a plan. Setting the plan in motion may take longer.

“Two to three months I think we need for sure before we can speak more precisely on further details,” Stracke told just-auto. Incredulous, just-auto called Opel in Germany, where a spokesman confirmed the apparent lack of urgency. Rüsselsheim says that “a rough timetable is being worked on.”

Remember: In February, Stracke said he expected and agreement with the unions in “a couple of months.” Now, he wants to have a plan some time in summer.

Last year, Opel lost a jumbo-sized $747 million. Nobody seems to be in a big hurry to plug the huge hole through which Opel loses money that GM makes elsewhere. This year, the losses might be higher. Karl-Friedrich Stracke did not want to make a prognosis in Geneva, and blamed the Euro crisis. At the same time, BMW, Daimler, Audi, Volkswagen silently wish the Euro crisis will continue: With a low Euro, their exports and foreign earnings will continue to produce bigger profits. Opel has been mostly kept out of the lucrative emerging markets. After Mercedes and BMW had reported record sales, Audi today said it is “well on its way” to achieving record car sales in the first quarter. Audi’s deliveries to customers rose 16.6 percent in February. Little BMW today announced a $9.8 billion pre-tax profit for 2011, well ahead of giant GM’s $7.2 billion pre-tax profit. You won’t hear any of them complain about a crisis.

There isn’t much Stracke can do. Contracts with the unions forbid further plant closings or firings until 2014. A breach of these contracts could become immensely expensive. The GM-PSA alliance buys Stracke time. He can wait until Detroit and Paris come to terms. Common PSA-GM models can’t be expected before 2016, at the earliest.

Years of losses are assured. Even Dan Akerson is convinced of that. “I think it’ll be a good year or two before we can achieve profitability in Europe again,” Akerson said yesterday in San Francisco.

Any hope for government aid would be futile. Ever since the abortive sale of Opel, Berlin does not have much sympathy for Opel. Now, a dead Opel seems like the solution for too much European capacity.