General Motors plans Opel and Vauxhall turnaround 0

General Motors are planning a turnaround on the company’s failing European brand Opel and Vauxhall. Despite posting a profit for 2011 of $9.19 billion, performances in Europe have not fared well at all.

Dan Akerson has recently that demand is simply not keeping up with the amount of cars being produced. Therefore cuts somewhere will have to be made.

Tremendous losses

General Motor’s European operations lost a staggering $747 million in 2011 before taxes and any interest. An original break even figure was hoped for before original forecasts were withdrawn. Although the loss was an improvement with the $1.95 billion back in 2010, it still makes for very poor reading. General Motors lost $562 million in the fourth quarter of last year. There was hardly any difference in that statistic when compared to 2010 when $568 million was lost.

Best profits in 103 years

General Motors have made a full recovery from their bankruptcy and are once again the world’s number one car producer overtaking Toyota. They have now made more profits than at any time during the company’s 103 year history. Sales were largely down to a great performance in the company’s homeland of North America. Mr Akerson is hoping that this turnaround will brush off within European operations.

Failure to cope

Vauxhall and Opel continue to lose out in Europe to rivals such as Volkswagen, who are Europe’s largest car manufacturer and Hyundai Motors. Both companies clearly need rescuing. When Europe’s financial state weakened, Vauxhall and Opel failed to cope with the pressure according to some experts.

Reduction in shifts

Shifts are currently under scrutiny to be cut down from three to two in Opel factories. This will help the reduction of costs and help the company to break even. The talks will apparently take a couple of months according to the Chief Executive Officer of Opel, Karl Friedrich Stracke.

There has not been an annual profit for more than 10 years for General Motors. Closure of Opel has crossed the minds of the top executives.

Export market needed

Part of the problem is that Vauxhall and Opel are able to produce a staggering amount of cars but all of which are destined for European markets. The export market beyond Europe for both brands are currently almost nonexistent.

Importing vehicles to Europe from other parts of the world has also been considered. Material and product costs need to be heavily reduced.

Are Opel and Vauxhall able to survive? This year is expected to another poor year.