GENEVA -- Karl-Thomas Neumann, Opel's new CEO, outlined three priorities while saying he took the job at General Motors' money-losing European subsidiary because of its improved vehicles and GM's commitment to spend billions of dollars turning the business around.
New Opel CEO Neumann readies turnaround plans
During a meeting with reporters today -- his third day on the job as Opel CEO -- Neumann said he believes GM executives will follow through on a 10-year growth strategy aimed at reversing the billions in losses that Opel has suffered for more than a decade.
"We have a new leadership team, a 10-year plan … and we have financing from GM in Detroit that not only allows us to cover our losses but also to invest billions of euros into new product," Neumann said.
GM CEO Dan Akerson has said many times that he believes GM can revive Opel and that there are no plans to sell the subsidiary, which the company nearly did in 2009. Still, rumors persist about whether GM might unload Opel or fold it into a joint venture with another automaker such as PSA Peugeot Citroen or Fiat.
Neumann took the top job at GM Europe from GM Vice Chairman Steve Girsky. He ran the region while searching for a replacement for former CEO Karl-Friedrich Stracke, who in July became the third Opel chief to leave the post in as many years.
Neumann, 51, most recently was head of Volkswagen China and served as CEO of supplier Continental AG. With his March 1 arrival and a freshly signed deal with its German unions, GM has put key building blocks of Opel's restructuring in place.
Neumann said he has three priorities:
1. Introduce new vehicles: It's in the process of launching 23 new or replacement models by 2016. Recent entrants include the Adam minicar and the Opel Mokka, which shares a platform with the Buick Encore.
2. Cut costs: Last week, GM reached a long-negotiated deal with labor leaders that Girsky said is important to the company's efforts to reduce costs and cut unused production capacity, particularly in Germany.
Unions agreed to the closure of GM's plant in Bochum, Germany, at the end of 2016. About 3,300 employees work at the plant, where the Zafira minivan is made. Labor leaders also agreed to a wage freeze through 2016 for more than 20,000 of Opel's German workers. In exchange, GM agreed there would be no firings during that time.
Girsky wouldn't say how much the new deal will save but said it will help GM reach its goal of achieving break-even in Europe by mid-decade.
3. Change Opel's culture: Neumann implied the company has been plagued by complacency.
"I hope today you have not seen the typical Opel guy who looks at his shoes and is really disappointed and complaining," he said. "We are in attack mode. We want to tell everybody inside and outside that we can make it."
GM Europe lost $1.8 billion last year and more than $18 billion since the late 1990s. Last year, GM eliminated 2,600 salaried and hourly jobs while cutting about $300 million in annual fixed costs. Girsky has vowed to extract another $500 million a year savings by 2015.
Neumann and Girsky said they expect overall European auto sales to decline this year but that Opel should retain its market share and lose slightly less than it did in 2012.
Last year, Opel brand sales slid 16 percent, to 816,000, worse than the 8 percent decline in overall EU sales. Girsky said Opel gained market share in January and February after 18 straight monthly declines.
Neumann said he wouldn't have taken the job had it not included a seat on GM's executive committee, a team of about a dozen of Akerson's direct reports.
"We have a full alignment with Detroit," Neumann said. "I'm sitting at the table where the decisions are taken. That in conjunction with the plan and our new product -- I'm convinced it's doable."
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.