Opel CEO says will keep investing
MONTE CARLO |
MONTE CARLO (Reuters) - Opel, the European arm of General Motors Co (GM.N), will keep up its product investments and will return to its mass-market roots, its chief executive said on Thursday, a week before he is scheduled to present a restructuring plan.
"We will make a significant investment in Opel's product portfolio," Karl-Friedrich Stracke said at an automotive industry event on Thursday, contrasting this with economy measures at some rivals.
"I noticed with interest that some of our key competitors have announced plans to cut product investment spending."
Italian carmaker Fiat SpA (FIA.MI) said last week it was cutting capital expenditure in Europe by 500 million euros ($635 million) this year because of a protracted market slump.
Stracke's comment came as GM and German labor union IG Metall try to hammer out a plan to restructure Opel's loss-making operations. He was due to present a Europe-wide plan to Opel's supervisory board on June 28.
Investors have been focused on the turnaround at Opel, which GM opted to keep in 2009 after halting a planned sale.
Opel signaled it would once again focus on winning business in the mass market segment following an attempt to move the Opel brand upmarket to compete with Volkswagen AG (VOWG_p.DE).
"We lost a bit of our customer base by moving up too quickly in the ranks and we lost some of our affordable customers with our pricing philosophy," Stracke said.
GM has lost money in Europe in the past 12 years, including $747 million last year, and has said the losses could continue for another two years.
In its bid to bring down costs in Europe, GM has agreed to an alliance with PSA Peugeot Citroen (PEUP.PA) that the two companies hope will lead to at least $2 billion in annual savings from shared purchasing, logistics and the joint development and production of vehicles and parts.
Stracke said Opel would cooperate with PSA on at least four major architectures, without providing further details.
"That is an important point going forward for all of us, to be announced later in the year," he said.
So far, GM and Peugeot have said they aim to begin sharing mini and larger cars in the so-called B- and D-size categories.
He also said Opel would announce next month a cooperation with Gefco, the car delivery group of Peugeot.
(Reporting by Christiaan Hetzner; Writing by Edward Taylor and Maria Sheahan)
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