Opel reform plan earns advisory board′s approval | Business| Economy and finance news from a German perspective | DW | 28.06.2012
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Opel reform plan earns advisory board's approval

The advisory board of Opel has given the green light to the German carmaker's reform plans. The scheme embraces several cost-cutting initiatives, but does not address any possible plant closures.

Opel's Advisory Board on Thursday approved management plans to reform and restructure the ailing German carmaker.

The plans envisage large-scale investments in modernizing the Opel/Vauxhall product range as well as a completely revised sales strategy. The advisory board also threw its weight behind a scheme to cut material, development and production costs in the years ahead.

It also endorsed plans for an even closer cooperation within the Opel-PSA Peugeot joint venture.

Sales plight

Advisory Board Chief Stephen Girsky said there was no viable alternative to the proposed measures. "The plans at hand will pave the way for Opel's strong future," Girsky added.

No mention was made about any possible plant closures. Opel leaders made it clear two weeks ago that the production facility in the western German town of Bochum would be closed after 2016, causing a storm of protests from trade unionists and the works council.

Opel's parent company, General Motors, has been incurring huge losses from its European division and has already been forced to close down plants in Antwerp, Belgium, and elsewhere. But the situation has not yet eased for Opel. Demand for its brands is still declining, with sales dropping by another 11 percent in May in the most important European car market, Germany.

hg/ccp (dapd, dpa)