Opel Expects to Turn a Profit by 2012 With its New Five Year Plan

Today, Opel CEO Nick Reilly announced the automaker’s new five-year plan, which calls for a 20-percent cut in capacity and a freshening of 80 percent of its offerings. Nearly 8300 jobs will be eliminated through the implementation of the new strategy.

All told, the plan will cost General Motors $15 billion, roughly a third of which is needed to run Opel during the restructuring process. GM will be asking those European governments with Opel or Vauxhall operations for loans to cover part of that amount. Opel will closing its Antwerp, Belgium, plant as previously reported – a vital move in reducing the automaker’s capacity for building new product.

Opel will also charge ahead with alternatively powered vehicles, adding an extended-range electric vehicle to a product plan that already includes the Chevy Volt-based Opel Ampera. The Ampera will be built in the U.S. alongside the Volt for the first three years of production. Plans to produce a minicar beneath the Opel Corsa are also being moved forward, while the focus on smaller engines and such fuel-saving technologies as start-stop systems is being accelerated.

Opel’s 8300 planned job cuts will see 1300 sales and administration employees lost, with the balance coming from manufacturing positions. Around 4000 jobs will be lost in Germany alone, with the remainder spread out through the rest of Europe. Opel currently employs 48,000 workers in Europe, roughly half of which are based in Germany.

By 2011, Opel expects sales that will allow the company to break even, while 2012 will be the first year for profit, according to Reilly. By 2012, Opel also expects that 80 percent of its lineup will be under three years old, with 12 all-new or refreshed vehicle launches scheduled by the end of next year.

Source: Automotive News