Opel’s massive makeover to cost $16.8 billion

A FIVE-YEAR €11 billion ($16.8b) overhaul of Opel announced by General Motors this week might pave the way for the restoration of European-made models to GM Holden’s line-up.

Announcing the massive re-working of GM’s European operations in the wake of the aborted sale to Magna International, Opel chief executive officer Nick Reilly said one of Opel’s goals was to build exports to the Middle East and Asia-Pacific.

“Several studies are under way to look at possible profitable export programs in the Middle East and Asia-Pacific,” he said.

Holden, which dumped costly European models such as the Astra, Corsa-based Barina and Vectra from its range in favour of cheaper Korean-sourced cars such as the Cruze and Epica, says it has no immediate plans for new European models.

However, spokesperson Kate Lonsdale told GoAuto that Holden product planners looked at all models offered by GM, and would consider them if they were a good fit and made a good business case.

She added: “They (GM Europe) have some really exciting product coming out of there.”

Cost cuts are a cornerstone of the Opel-Vauxhall restructuring program outlined by Mr Reilly, who hinted that “growth markets” would be targeted by the new leaner Opel-Vauxhall.

Left: Opel executives announce the restructuring plans.

He said the company would ask European governments for €2.7 billion in loans or loan guarantees, with the rest of the money to be found by GM.

Part of the money will be used to cut production capacity by 20 per cent and shed 8300 manufacturing and white-collar jobs, with more than 2000 coming from the closure of Opel’s Antwerp plant.

Half of the job losses will fall in Germany – a situation that has riled trade union IG Metall, which represents most German auto workersThe union immediately condemned the plan on Tuesday, refusing to contribute wage concessions and recommending German state and federal governments decline the aid request.

Vauxhall’s Ellesmere Port plant in England – once thought to be high on the list of possible casualties under a Magna restructure – escaped any job losses at a manufacturing level.

Mr Reilly, who once was a manager at Ellesmere Port, said GM Europe intended to build a European company that was profitable, self-sustainable and fit for the long-term.

“This keeps a manufacturing base in Europe,” he said “It is good for Europe, good for our employees and good for our customers. We therefore trust that the plan will be supported by our employees.” Mr Reilly said the plan would reinvigorate 80 per cent of Opel/Vauxhall carlines by 2012 and place a strong emphasis on alternative powertrains.

The refreshed models include eight major launches in 2010 – including the second-generation Meriva people-mover, Corsa light car, Movano van and Astra Sports Tourer – and another four in 2011, most notably the plug-in hybrid Ampera, the European version of the Volt.

Mr Reilly pledged to spend €1 billion on innovative and fuel-efficient powertrain technology as it introduces a range of new green products.

These included an extended-range electric vehicle in addition to the Ampera – a vehicle that is set to make its debut in concept form at this year’s Geneva motor show in March.

Opel would also push ahead with pure battery-electric vehicles in smaller-size segments, while expanding LPG and CNG applications, idle-stop technology and “right-sizing” of engines.

“In addition, the company has accelerated efforts to introduce an entry in the sub-Corsa segment and to make a strong push in the light commercial vehicle business,” Mr Reilly said.

Mr Reilly promised a sharper product focus on a newly-refined Opel “DNA” – a brand strength that he hinted would not be allowed to be diluted by influence from Detroit.

“Opel/Vauxhall has a clear vision: to be a leading European manufacturer of high quality, desirable automotive products, based on German engineering, driven by a united team of professionals and respected around the world,” he said.

“This vision will be realised by offering an exciting and expanded product portfolio based on a strategic push into alternative propulsion technology.

“In order to support this vision, the company has sharpened and refined its brand DNA and product pillars, and is embarking on a program that ensures this DNA is engrained in every future Opel-Vauxhall product.

“Future products will be developed in Rüsselsheim at the International Technical Development Centre.

“If they are based on a vehicle architecture developed elsewhere, they will return to Rüsselsheim early to ensure they deliver on the Opel/Vauxhall brand promise.”