RUSSELSHEIM, Germany - One of 18 turnaround teams studying ways to slash costs and improve the competitiveness of Adam Opel AG will recommend to Chairman Carl-Peter Forster that production of the big, flagship Omega sedan be terminated by the end of this year.
'The team's conclusion is that it doesn't make economic sense to continue the Omega until 2003, when the successor is due,' said a senior manager at a key Opel supplier.
But a source close to the Opel management board said the flagship probably will survive to the end of its normal cycle.
'Although it is not selling in big numbers, the Omega is returning a solid profit,' said the source. 'We recently invested in keeping the model attractive. This money has been spent already, so why burn it?'
Moreover, the source said, production must continue until 2003 because Opel needs the Omega's station wagon version.
Omega sales in Western Europe fell 31.6 percent in the first five months of 2001 to 18,418 units.
The Omega replacement will be based on an enlarged GM front-wheel-drive Epsilon platform.
The next generation will not be another three-box sedan. The top model, being developed under the code-name 'Vectrum,' will resemble a combination of Opel's Zafira compact minivan and Renault's futuristic Avantime luxury crossover vehicle.
But it won't be called Omega or Vectrum, sources say.
Since Forster arrived April 1, the ex-BMW executive has led a top-to-bottom review of Opel. Last month, he outlined Opel's turnaround plan, called Project Olympia, which he intends to complete in September.
'I cannot confirm that a project team is specifically assessing Omega production,' said an Opel spokesman last week.