Perspective 2022: Ten Years More Of Opel Losses
We have documented how GM and Opel have a hard time separating themselves from the Bochum plant, something that is urgently necessary to address Opel’s dangerous overcapacity. The date to close the plant is being kicked more and more down the road and well past the use-by date of the current and some future Opel CEOs. Currently, it looks like Bochum and gaping wounds will stay open through 2017. Or maybe longer …
GM, Opel and the state of North Rhine-Westphalia started a working group with a noble cause: Create jobs in the region around the Bochum plant. Or rather “work streams on future utilization of the Bochum site.” Said GM Vice Chairman Steve Girsky:
“This working group will be all-inclusive, and have as members representatives of all stakeholders who wish to be involved in a positive way for the benefit of our employees and all the citizens of Bochum and NRW. We look forward to contributing our efforts, as well as our financial resources, to this important work.”
If the intent is to lure well paid Opel workers away from Bochum where they will get a few hundred thousand dollars in severance if they sit it out until the bitter end, then good luck.
The working group has an interesting name: “Bochum Perspective 2022.” Which is probably how long it will take to close Bochum. According to current plans. Which can change.
In German auto industry circles, there was a saying: “Wenn man nicht mehr weiter weiss, gruendet man nen Arbeitskreis.” („If you don’t know what to do, launch a working group.”) It’s good to hear that this venerable philosophy is still being practiced at Opel.
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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I know closing a plant in Germany is expensive, but is it really cheaper to just run the whole company in the red for basically two decades straight? They've lost $16 billion on Opel in the past decade (with a decent economy for most of that period), how much more are they going to lose by 2022, considering we're still in the midst of a recession? What would it cost to just buy off all the workers and shut Bochum? $1 billion, $2 billion? Seems like quite the bargain against $16 billion. There has to be some other angle here that GM's playing that isn't immediately obvious, because this doesn't seem like a smart move for anybody.
This "Arbeitskreis"/Working Group scheme, as I've heard today in the local radio, is primarily aimed on the target of "what do we we do without Opel producing at Bochum anymore, after the Opel Zafira production finishes in 2014, or so. Current ideas, as of today, are, e.g. finding ways to settle new industries in this area, as, e.g. battery producers, E-car producers. I appreciate the common approach of politicians and GM honchos to find ways out of the overcapacity mess. But I'm not too convinced that this will work. Probably, they should find a completely different approach for the Bochum problems. Why not tearing down everything GM-like and create a new industry combined of a permanent Oktoberfest plus a strong touch of St.Pauli? Given the central location of Bochum in Europe that might work better, IMHO.
Way to go GM! From preliminary voting numbers it seems Obama is in for another 4 years. Bring back the auto task force and ready your check books. GM is going to be needing another bailout very soon. As a GM fanboi, it is getting harder by the day to make excuses for this company. The management has shown complete ineptness over the last two years. Great companies are made by taking problems head on and not putting them away for someone else to deal with. GM is run more and more like a Govt program. No surprise considering who owns them! Kudos to Ford for growing a pair.
I suspect the reason GM is dragging it's feet on a very expensive set of plant closures in Germany, is because they honestly hope they can sell enough cars to get these plants back to capacity. To have any hope they need some competition to go bust. PSA going under would have helped, but GM have now bought some of that so really it's all getting self defeating.