Earlier today, Opel/Vauxhall CEO Karl-Friedrich Stracke — who recently headed up GM’s global engineering efforts — outlined the automaker’s growth plan to return to profitability. The plan consists of ten essential tentpoles that will turn around The General’s loss-making business in Europe:
1. Model Initiative: Opel/Vauxhall will have invested about €11 billion in a comprehensive new model campaign through 2014. This year alone, the company introduces six new models. “We’re following a clear growth strategy and are pushing into new segments where we have not yet been represented,” Stracke said, referring to the subcompact SUV Mokka, a new Astra version, a completely new convertible and the Adam, Opel/Vauxhall’s stylish new urban vehicle. The Adam will be built at the Eisenach plant, making it the only model in that segment built in Germany.
2. Powertrain Initiative: Opel/Vauxhall will introduce three new engine generations in the next 18 months. This highlights the high pace of Opel/Vauxhall’s product offensive.
3. Environment Initiative: Opel/Vauxhall wants to expand its position as the leading manufacturer of alternative propulsions. “We’re very proud that Opel/Vauxhall is quite a bit ahead of our competition with products such as the electric Ampera,” said Stracke.
4. Export Initiative: Opel wants to enter new markets – including Australia, North Africa, South America and the Middle East. “We’ve already successfully introduced Opel to the market in Israel and we’ll expand our activities in China, Russia and Turkey,” Stracke said. The Opel/Vauxhall CEO made it clear that exports to regions outside Europe, however, won’t be enough to operate the European factories at full capacity. “We have to do our homework here in Europe.”
5. Quality and Customer Satisfaction Initiative: Opel/Vauxhall has launched a number of initiatives that should make the company one of the industry leaders in quality – both in products and customer service.
6. New Brand Strategy: Opel/Vauxhall is working on a new, clear brand strategy that is geared toward both traditional and attainable potential customers.
7. Increasing profit margin per vehicle: Opel/Vauxhall has launched several initiatives to increase its contribution margins. This, in particular, includes a thorough review of the material costs. Opel/Vauxhall also wants to reduce the manufacturing complexity of its cars.
8. New Alliances: Opel/Vauxhall is open to beneficial partnerships such as the one that GM recently made with PSA Peugeot Citroen: “At the moment we’re at a stage where we’re studying several specific projects with PSA in detail,” said Stracke. The Opel/Vauxhall CEO emphasized that the alliance is balanced in nature. “If we decide to move an Opel/Vauxhall development project to PSA, then we’ll balance it by bringing a PSA project to Rüsselsheim.” Stracke repeated that no jobs will be lost in the International Technical Development Center in Rüsselsheim because of the alliance – in fact, the alliance strengthens the development center’s future.
9. Production Strategy: Opel/Vauxhall is upgrading its manufacturing plants. “The clear goal here is to run each of the plants on three shifts,” said Stracke. The first example of that will be seen in conjunction with the allocation of the next Astra generation. “Given the forecasted market volumes, it would not be viable to produce in more than two plants. If we run these two plants with three shifts, the production costs for the next Astra generation will be significantly below the costs of building the current Astra. Right now we’re operating three plants with just two shifts.” Opel/Vauxhall is planning on investing more than €300 million in the two future Astra plants.
10. Studying Production of Chevrolet Models in Europe: “We’re in discussions with management in Detroit and Shanghai to study whether or not there is merit in building Chevrolet vehicles in Europe to improve capacity usage,” explained Stracke.
Stracke emphasized that this is not a cost-cutting plan and is instead a “comprehensive plant to quickly improve profitability, irrespective of if and how much the market is going to pick up steam.” The CEO is expected to present this plan to the Opel Supervisory Board in June.
Expect several follow-up articles about this plan throughout the week from the only place providing you with original up-to-the-minute GM News — GM Authority.