Michael Lohscheller has accomplished in 14 months what no predecessor achieved in decades. He returned Opel/Vauxhall to the black. The passionate marathon runner, who recently instituted a new monthly program called "Run With The Boss" did not just turn around the perennial money-loser but brought it to record results that rival those of Europe's top-performing volume automakers. Lohscheller spoke with Automotive News Europe Correspondent Christiaan Hetzner.
PSA CEO Tavares has said profitability brings freedom. Opel appears to be on track to reach its profit margin target of 6 percent in 2019, seven years ahead of schedule. What will you buy with your freedom?
In the past, Opel had many different restructuring programs with many different names led by many different management teams and yet the goal of profitability was never reached. We agreed on concrete targets with the PACE plan including a long-term target of a 6 percent operating margin by 2026. The fact that we are on track to deliver our commitment on profitability -- and we are pursuing our effort to do even better -- is extremely important for our credibility externally but even more importantly internally. That's why I'm representing Opel on PSA Group's four-person managing board.
How big a deal is that to you and your team especially considering that the head of the group's flagship brand, Peugeot, is not on the managing board?
PSA has a great set of strong brands, however, this is indeed the first time that Opel has a voice on the company's top decision-making body. The move has been very well-received by our workforce. You wouldn't believe how many employees have approached me to say how happy they are that Opel finally has a seat at this table.
What have you been able to accomplish with that board seat that you could not before?
On an operational level everyone on the 19-member Global Executive Committee can campaign for their ideas, so it's more of a symbolic value by emphasizing that Opel plays an important role in the group. PSA is all about performance. If you don't deliver, then it doesn't matter what board or committee you are on.
What motivated the team to achieve the target seven years early?
When you have a new owner after two decades of never-ending restructuring plans, people know change is not going to be incremental any longer. We used the opportunity to question everything about our operations.
We reinvented Opel. We started with symbolic topics. Whether it was cookies at meetings or the personal chauffeur for the CEO, cost cuts were made across the board. When we temporarily cut working hours at our Ruesselsheim factory in January 2018, we also reduced hours here at headquarters. That never happened before. We reduced the number of senior executives by almost one-third to accelerate the organization. These moves did not go unnoticed. People saw a whole new company. This had a profound effect internally and helped the team execute much more quickly and easily. We couldn't have imagined that we would slash fixed costs by 28 percent last year. The biggest levers, however, were the reduced complexity combined with improved pricing power and revenue per car. They really made the turnaround possible.
Can you sustain the 6 percent margin when automakers are indicating we are at peak profitability as CO2 compliance starts to hit the bottom line?
First of all, we are very ambitious and will not slow down our efforts to continually improve our results. That being said, starting next year our results will be consolidated with the rest of the PSA brands.