After posting financia losses for the last decade, General Motors’ European subsidiary, Opel-Vauxhall, has been vehemently fighting to turn itself around. The ultimate goal is to achieve a 5 percent EBIT (Earnings Before Interest and Tax) margin by the year 2022. But before it can do that, Opel must first break even.
GM has been projecting for Opel to break even financially for the 2015-2016 timeframe. That goal now appears to be in sight, with Opel Group CEO Karl-Thomas Neumann recently stating that the subsidiary has beaten all internal targets since he took over as CEO four years ago this month. And though Neumann is confident that 2016 will be successful, he says that the final miles of any race are the always the most difficult.
“Since I arrived here we’ve met our [internal] budget and overachieved on our targets for 11 straight quarters”, Dr. Neumann told Auto News. “I always compared it with a marathon, the further you go, the harder it gets. We can see the target now. We have built the brand. We have fantastic product. We will fight for these last miles and get across the finish line.”
Though Opel has posted losses for the last decade, the losses have been dwindling — thereby showing progress to reward parent GM for its huge investment:
- 2015 calendar year loss $800 million
- 2014 calendar year $1.4 billion loss
Comments
I am no accountant, but I follow GM’s sales worldwide. I don’t understand how a brand that is usually in the top 4-5 throughout much of Europe can not break even and even lose so much? Plus all their engineering and exports to Buick etc? It is like Chev in South America, currently leading the way in Brazil, Argentina, Venezuela etc etc and yet, they are losing money? Something not right when you are the number one brand and losing money.
Opel AG unfortunately never really received full licencing fees; the go from Buick’s global operations to Maryland. Buick spends little for R&D, surviving off of technology paid for by Opel and to a certain extent (noise proofing) Cadillac.
I thought that GM would make Opel global through the creation of a Opel-Buick-Vauxhall division but it’s never fully materialized.
GM plays a shell game with Ooel profit to avoid taxes. If Opel was honestly paid for its work then it would b be a profitable company–a fact Wall Street fully understands.
No it wouldn’t.
Payments between the group’s companies have to be neutralised in the finacial statement of the group. So if GM would pay higher fees to Opel it would have absolutelly no Impact to the income statement of GM and so not to the balance sheet.
and all of this is not as simple. it takes time. Some think that everything is so simple.
the only hope is that the new GM is a very smart and successful. Old GM had for some time a very foolish and ill managed. had a very difficult time. The quality is low. and many of the products and brands died.
But in general, it appears that GM will be difficulties in pretty fast section. and hopefully we will see in the past a very successful and high-quality car manufacturer.
Investments must be very large to be the best. come yet and the negative numbers. if you do not invest in better products for you will die forever.
Old loss can be liquidated first. now we need to eradicate major investments in debts that remained difficult period. and go to a new page on a much more successful.
GM must not fall asleep. which is obtained from the more difficult it is better.
Some think that the success of the procedure and the cars just grow on trees.
and the sales figures do not show that the products are the best. The quality and technology, with design shows it.
The European automotive industry is a very tough and complicated world of difference.
do you know how big losses is dead SAAB and others. I hope that the old GM executives were put in prison for life. stupid people who could not be introduced into. in fact, I think that the old GM managers had their own vision of the kind of silly things. Plus, they did not know how to drive, and were not at all stupid. GM has suffered throughout.