General Motors and Opel have long pledged 2016 would be the brand’s year. Opel has not recorded a yearly profit since 1999, and 2016 has been shaping up to be the first year in over a decade it would do so.
However, Britain’s exit from the European Union has thrown a cog in the profitability machine.
“We are facing strong headwinds at the moment, particularly in our largest market – the United Kingdom. The Brexit decision is not a good omen. Therefore the second half of this year is going to be anything but easy,” Opel Chief Executive Karl-Thomas Neumann said in a video posted on his Twitter account.
Yahoo reports GM and Opel are looking at $400 million in cuts across its European operations to offset predicted financial speed bumps to come.
“The result of the vote has adversely impacted the British pound, and the uncertainty has put a strain on the UK auto industry. If current post-referendum market conditions are sustained throughout the remainder of 2016, we believe it could have an impact of up to $400 million to the second half of 2016,” GM Chief Financial Officer Chuck Stevens said.
Although an official exit from the EU won’t occur overnight, automakers are already making contingency plans should things continue to head in unfavorable conditions. The Vauxhall Ellesmere Port assembly is the largest chip in Britain’s bet on sovreighnty.