How Opel will turn it around 0

Opel are set to meet up with General Motors executives, the company that owns them and show them plans on how they plan to refresh the brand. There have been numerous calls within the General Motors Head office to close the Opel brand.

They along with sister brand Vauxhall have been making losses in Europe for the last 12 years. Some are defiant and want to keep faith in the company. Those who wanted to keep the company alive may see their efforts finally getting somewhere. Currently the European mass car market is effectively running at a loss. More vehicles are being made than what is currently being sold. How does that make any sense?

The company’s Bochum plant will effectively close in 2017 and not receive any investment. Chevrolet and Opel production may shift to South Korea as a result rather than being produced in Europe. General Motors are growing impatient. They are running at a loss of $3.5 billion over the last three years within the European region. The European mass car market does not look like it is improving either. Labour costs are currently a big issue.

A way of conquering that will be to replace workers who have left with temporary workers who command a lower wage. Those workers who are not employed on the assembly line may also be transferred to different departments where wages are paid at a lower rate. The company’s wage structure is one the company’s biggest mistakes in recent times. Their wage structure is not clearly balanced or within an appropriate hierarchy.

Workers are basically being paid the same rate, even where they are not supposed to. For example a security guard will receive the same wage as someone who works within logistics. Opel are unlikely to cut anyone’s wages who are already earning a fairly high salary. They will look to the future and ensure that this type of wage structure does not occur again.

Either way the future of Opel remains unknown. The company clearly need a tremendous amount of restructuring as need to follow market patterns. The European market is not what it used to be thanks to the Euro Zone crisis. Consumers are now less confident in the market. Banks are also refusing to give out car loans more often than before.