Opel supervisory board approves turnaround plan
MUNICH -- General Motors Co.'s Opel/Vauxhall division said its supervisory board today voted in favor of a midterm business plan aiming at bringing the unit back to sustainable profitability.
The plan includes major investments in new products, combined with a new sales and branding strategy, Opel said in a statement.
"The plan approved today paves the way for a strong future for Opel. GM stands behind Opel and supports management and labor," said GM Vice Chairman Stephen Girsky in the statement.
Girksy chairs Opel's board, which is split up evenly between representatives from GM and elected delegates from the 40,000 odd workers at Opel and its UK sister brand Vauxhall.
The business plan for the four years through the end of 2016 entails "massive" investments in the product range, an increase in exports, cuts in material, engineering and development costs as well as added savings from GM's alliance with PSA/Peugeot-Citroen.
No concrete details were provided, nor did Opel say when it expected to return to the black, however. Its underlying operating loss narrowed last year to $747 million from $1.95 billion in 2010.
"The support of GM shows just how important European engineering and the European sites of Opel and Vauxhall are for the group," said Opel's top labor leader, Wolfgang Schaefer-Klug.
Opel gave no further details on its new brand strategy, but last week Opel CEO Karl-Friedrich Stracke told the Automotive News Europe Congress that the brand will make pricing adjustments to its cars to make them more affordable to the carmaker's traditional mass-market customer base.
Stracke also said the unit will not reduce investments in new products despite Europe's debt crisis. In May, Opel said it will invest about 11 billion euros through 2014 in new models such as the Mokka subcompact SUV, Astra sedan, an Astra-based convertible and the Adam minicar.
Reuters contributed to this story