Opel’s CEO, Karl-Thomas Neumann, is certain the company will once again return to profitability in 2016, despite the fact that the company was recently forced to cut production at its plant in St. Petersburg, Russia.
The company, which will also idle the factory in the coming months, was forced to make the drastic decision in the wake of Russia’s economic sanctions, which have led to a weak currency and a plunge in product demand. As a result, GM announced last month that it would withdraw the brand from most segments in the country.
As it turns out, Neumann isn’t too worried. “We can make up for that”, he said, pointing to the fact that sales in Germany, Spain, Portugal, and Poland were trending above expectations and would help offset the loss in Russia.
But it’s not as though Russia was the only problem standing in the way of Opel. GM’s European business has reportedly lost $18-billion over the past decade and it’s struggled to pin-down a CEO, according to Reuters.
However, GM has slowly managed to right the ship and Neumann promises the company will return to profitability by 2016 at the latest. Meanwhile, he plans to raise Opel’s operating return to 5 percent by 2022, based on earnings before interest and tax.
GM’s had a heck of a time in Europe, but it seems profitability is finally on the horizon.