Opel restructuring plan 0

Opel, the European version of Vauxhall, are under consideration for major reconstruction according to reports across the automotive industry.

Debts

The company are currently faced with debts and bankruptcy, some expert financial analysts have said. This could mean the company axing staff across the board and plant closures. Many may want Nick Reilly to reverse his decision to retire next year after he brought about prosperity for the company during times of economic downturn.

Stephen Girsky, the new Chairman of Opel’s supervisory board, indicated that the company may seek new partners to lessen the pressure of the current expenditure. A sale of the brand hasn’t been ruled out either, once the brand has been rejuvenated.

Adam Jones, who is a Morgan Stanley Analyst, said that major changes could be imminent. He said “You can’t say the words ‘all options are on the table, we rule out nothing’ unless there’s something fundamentally changing,”

Opel still important to General Motors

Girsky has previously been a saviour to the company in the past. Back in 2009 he voted that General Motors keep the Opel brand rather than selling it. He previously said that Opel remains a very important part of General Motors as opposed to those who underestimate the company. His exact words were “People tend to view Opel as this thing you can just flip overboard and that’s sort of not the way we view it. We view it as something that’s integral to GM.”

Board changes

Girsky’s plan is to essentially cut costs and increase profits. It’s a lot easier said than done but it is an essential ingredient to the company surviving.

Changes have already been made in that respect to increase the chances of making profit.  Dan Ammann who is the current Chief Financial Officer and Tim Lee, who is the President of international operations, have recently been promoted to the Opel Board. These changes have come about due to top executives at the company being dissatisfied with the current status of the country.

Eurozone crisis

The Eurozone crisis bought about an astonishing $300 million loss in the third quarter for General Motors Europe. Opel have consequently abandoned their break even target.

Opel are in a lot of trouble at present which subsequently mean that Vauxhall are too. We’ll have to wait for restructure plans to be announced which are expected early next year.