Opinion: What next for Opel? | Opinion | DW | 06.03.2017
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Opinion: What next for Opel?

The carmaker Opel is again set for exciting times. But despite new owner PSA group's talk of creating a European champion, the path is likely to be painful, says DW's Henrik Böhme.

Of course, all the actors involved tried to sell the purchase of Opel by France's PSA Group with enthusiasm. Mary Barra, the CEO of General Motors, for example, now sees Opel in a "stronger position." In reality, she will be glad to be finally rid of her problem child.

A $15 billion (14.1 billion euro) loss over the past 16 years left no love lost, and GM had put its European subsidiary in the shop window several times in recent years. It was even reported over the weekend that secret negotiations took place with Volkswagen in 2012. So now after 88 years of ownership, for the Americans at least, this chapter is over.

New chapter

But for the struggling 155-year-old carmaker, however, a new chapter begins. Cue enthusiasm Part 2; the takeover is a chance to create a "real European car champion," according to Carlos Tavares, head of Opel's new mother PSA and Opel CEO Karl-Thomas Neumann. Apparently, the latter only kept up with the weeks of secret negotiations between the Americans and the French by reading it in the newspaper, which is not ideal.

Boehme Henrik Kommentarbild App

Henrik Böhme, DW Business

PSA's optimism is based on a simple math: The French automaker with its Peugeot, Citroën and DS brands sold more than three million cars last year, while Opel and its British sister brand Vauxhall sold 1.2 million. Together, that's 4.3 million and a European market share of 17 percent, which would put PSA in second place behind the unbeatable Volkswagen group. But here the plan's weakness is already clear: PSA is a European player that sells its cars almost entirely in Europe. It is dramatically weaker than its international competitors, such as VW, Toyota or Hyundai or Hyundai.

Legitimate worries about jobs

Of course, many people are worried about their jobs at Opel and Vauxhall plants in Germany and the UK. GM's existing promises over factories are to be maintained, but they will expire in the foreseeable future. And then the cards will be shuffled again.

Frankreich PK PSA, General Motors und Opel (Reuters/C. Hartmann )

The 2.2 billion euro takeover of Opel was announced by the three parties in Paris on Monday

The new group now has almost 20 plants in Europe. This is only viable for a so-called volume producer if these factories are run highly efficiently. Making efficiency gains is Carlos Tavares' strength. The 58-year-old Portuguese national restructured the PSA Group after it slipped into a deep crisis in 2011. How? Among other things, by eliminating 30,000 jobs. Rumors of 8,000 job losses at Opel's sites are already circulating. With 38,000 employees across Europe, of which 19,000 are in Germany, this would be a sizeable number, despite the fact that Opel will add considerably to PSA Group's headcount.

Europe's electric champion?

Tavares thinks the takeover will save 1.7 billion euros a year, which is perhaps the only thing that is certain at this time. He's also promised not to "govern" at Opel. Instead, his new baby will have its own "autonomy." PSA's CEO says he trusts Opel's people "and their ability to improve." What else would he do? Steam right in?

While the Americans will hardly shed a tear after years of turmoil, the Opelans have reacted relatively calmly to the news. "It can't get any worse," is the motto at Opel's plants in Rüsselsheim, Eisenach and Kaiserslautern. But will the automaker's future be better? Perhaps the new company will become a European champion in the field of electric and alternative-fuelled cars. With the right plan, it could be!

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