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Opel Slashes Work Hours at 2 Key Plants

Bigger reorganization in the works.

by on Aug.24, 2012

Opel continues to flounder as sales plunge.

With its sales down 15% for the year and the situation likely to get worse, General Motors’ floundering Opel brand will slash production at two of its key German plants.

Several thousand workers will be idled for at least 20 days through the end of the year, the maker announced after reaching an agreement with its union, the powerful IG Metall.  The move is likely the first in a series of steps that Opel will take as it heads towards a broader reorganization being crafted by GM Vice Chairman Steve Girsky, who was named interim chief of European operations earlier in the year.

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The European automobile market is declining dramatically,” Opel’s head of personnel, Holger Kimmes, said in a statement explaining the company’s need to slash production.

GM lost $747 million last year on its European operations and Opel was a primary factor in a 40% slide in the maker’s second-quarter 2012 profits.  In all, Europe is expected to run up losses of as much as $2 billion for GM for all of 2012.


GM May Take 7% Stake in France’s Peugeot

Proposed alliance unlikely to resolve GM's Opel problem.

by on Feb.28, 2012

Will GM CEO Dan Akerson approve an alliance with PSA Peugeot-Citroen?

General Motors could take as much as a 7% stake in French automaker PSA Peugeot Citroen as part of a new alliance the two manufacturers are putting into place.

The alliance is expected to involve a variety of different areas of business, notably including joint vehicle and powertrain development, according to knowledgeable sources.  The key goal for both manufacturers would be to improve their economies of scale, especially in Europe, where GM last year lost $747 million.  But whether the proposed alliance will help turn things around for GM’s red ink-stained Opel division remains to be seen.

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Peugeot is the Continent’s second-largest maker on a unit sales basis but has serious problems of its own, rising debt leading it to plan a 1 billion Euro ($1.34 billion) rights offering that notably could reduce the holdings of the founding Peugeot family.

Beyond possible cross-holdings, the alliance appears to focus on three areas, according to sources: (more…)

GM Europe Coming Under Tough New Scrutiny

Balance sheet bleeding again.

by on Nov.09, 2011

Opel's declining market share is weighing down the General Motors balance sheet.

General Motors faltering European operations are coming in for additional scrutiny from GM’s top management after posting a loss for the third quarter – and putting an end to hopes of finally staunching the flow of red ink at the troubled subsidiary.

GM Europe finished the quarter reporting an EBIT-adjusted loss of $300 million. Overall, GM earned $1.7 billion in the third quarter, compared to $2 billion during the same period in 2010, the 15% decline largely the result of problems in Europe and Latin America.  (Click Here for more on GM’s second quarter results.)

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GM Chief Financial Officer Dan Ammann lamented that, “We have to do a better job in Europe and South America. The results there are just not sustainable.”

GME had shown some positive signs by breaking even during the first quarter of 2011 and turning in a modest profit three months later, but the latest figures raise questions about forecasts that the European subsidiary will be able to push back into the black for all of 2012.