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.
Well, ahem, somewhere in GM, there is a Powerpoint file where it all makes sense. Really. Just trust them. After all, they have such a wonderful track record with acquisitions, global operations, and partnerships. That is why GM is the most emulated powerhouse that it is today, never a financial bind, and with the highest profit margin in the industry. Cough. The “high pay for top talent” theory is at work in front of our eyes.
The ‘ Plan ‘ for OPEL is s simple one .
Place the patient on Hospice Care
Minimize the pain
Get all his affairs in order
Then ….. RIP OPEL : it was mighty nice knowing you
Anyone that thinks even for a minute that OPEL’s tie in with destitute PSA will in any way help either to come out of the hole they’re both in is fooling themselves .
OPEL – The new SAAB ( sob ) story for 2012 . With PSA ( unless the French pull an ObamaBush and bail them out ….. again !!!! ) soon to follow
My prognostication ? The next five years will be the years of more than a few of the Auto Manufactures going Bust . Got GM stock ? SELL !!! while you’ve still got something almost worth selling
The scary part is that Stracke’s declaration that they’d announce a plan within a few months was made to *walk back* Girsky’s comment at Geneva that we’d just have to wait months or years or whatever until the plan revealed itself. That was a gaffe that promptly took 4% off the stock price.
Really, GM has two options: Wait until 2014, or try to sell the union on doing something sooner. They’re obviously taking a stab at option two. That’s unlikely to result in a quick or comprehensive restructuring, but any progress is still progress.
Interesting that Opel makes one of its smallest (and probably lowest-margin) models, the Corsa, in high-cost Germany. Is this contributing to losses?
Most of Corsa volume (5 dr) is produced in the Spanish plant of Zaragoza. Only 3 dr version (much lower volume) is assembled at Eisenach (Germany)
The beatings will continue until the morale improves. When “new” GM Detroit dosent allow Opel to compete with the other Germans, the same problems that befell Saab will continue. GM just dosent get the concept of a GLOBALLY COMPETITIVE PRODUCT.
(just in case you are holding GM stock,)
Um snort, sputter, haha-ha. I’d rather own Greek government bonds.
Seriously, GM-USA & GM-China are significantly dependent on the expertise of the Opel division for engineering expertise, sorting out chassis dynamics, etc. As a former exchange student, I know the difference between a Stadt and a Staat. I understand also that Opel is encumbered by government interventions and bad union contracts. Yet on the accountants’ balance sheets, Opel is a money loser.
Since Bertel is the expert of all experts on the TTAC interpretation of the German auto industry, why is Opel so sick?
On an accountants’ balance sheets you can proof that Saab is making money and that Apple is loosing money.
To elaborate for Herr Schmitt (and the GM-fold):
If a division is a poor seller in its inbred, hyper-competitive home market (Europe), yet the parent company (General Motors) is dependent on the engineering expertise of the Opel subsidiary, does Opel get any balance sheet credit for what it provides to the parent company (GM)? It seems like the answer is “No!!”
Spin off those engineering resources into a wholly-owned subsidiary separate from Opel Manufacturing, so that it gets paid by GM for the work it does… then in 2014 have a come-to-Jesus meeting with the Manufacturing unions.
That solution makes sense. Excuses for Opel’s plight won’t cure the problem.
What is the difference between a Stadt and a Staat?
Over the years haven’t several US and foreign auto manufacturers established design and engineering offices in California? How have they worked out? Would Opel engineers like to move to California?
As far as a remember Opel always made rental grade cars – German equivalent of Chevrolet. Now there is a Chevrolet as a GMs world brand. Who needs Opel? It cannot compete with BMW or Audi. Audi always charged more for their cars than Opel and for good reason. Ford? Yeah but how about Chevrolet? And Ford is still better (and to good degree) than Opel. If Opel goes global Chevrolet will kill it. So it will not happen. The plan was to make it premium. But then there is Buick. Would buy Opel rather than Buick? I do not think so so. So what left – to make it Germany-only equivalent of Buick. But it has no reputation of being premium car. Buick at least always made premium cars. And how you can have premium brand in Europe if there is already Cadillac, which is RWD which premium car should have. Simply put it – nobody really needs Opel. Just rename Opel engineering center Chevrolet and sell Opel to Russian mobsters or Chinese. Nobody is going to cry after Opel. Ford calls German Ford – Ford why GM cannot not call Opel Chevrolet?