Opel supervisory board approves turnaround plan
FRANKFURT (Reuters) - Opel, the ailing European arm of General Motors (GM.N), took a key step towards returning the brand to long-term profitability, after its supervisory board voted in favor of a midterm business plan that included "massive" investments in its model range.
"The plan approved today paves the way for a strong future for Opel. GM stands behind Opel and supports management and labor," said GM Vice Chairman Stephen Girsky in a statement on Thursday.
Girksy chairs Opel's board, which is split up evenly between representatives from GM and elected delegates from the 40,000 odd workers at Opel and its UK sister brand Vauxhall.
The business plan for the four years through the end of 2016 entails "massive" investments in the product range, a redesigned brand strategy, an increase in exports, cuts in material, engineering and development costs as well as added savings from its alliance with France's Peugeot Citroen (PEUP.PA).
No concrete details were provided, nor did Opel say when it expected to return to the black, however. Its underlying operating loss narrowed last year to $747 million from $1.95 billion in 2010.
"The support of GM shows just how important European engineering and the European sites of Opel and Vauxhall are for the group," said Opel's top labor leader, Wolfgang Schaefer-Klug.
Dan Akerson, the chief executive of parent GM, wants to stem the constant flow of red ink at Opel by shrinking its fixed-cost base and running each plant at maximum capacity on a three shift basis - something analysts say is only possible if he closes at least one of the six car factories.
Strident union opposition to plant closures have forced Opel to take a two-track approach to its restructuring - putting the plan to a boardroom vote while negotiating separately over staff cuts in Germany that likely would only take effect after the last year of the plan.
(Reporting by Christiaan Hetzner)