Drive 2022: Neumann touts Opel's 10-year plan

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Thread: Drive 2022: Neumann touts Opel's 10-year plan

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    Drive 2022: Neumann touts Opel's 10-year plan

    GM official touts Opel's 10-year comeback plan
    'Drive 2022' expected to show profits by mid-decade despite 'grim' market

    By John McCormick
    March 7, 2013

    Geneva, Switzerland After years of heavy financial losses at Opel, including a $1.8 billion loss in 2012, General Motors Co. is implementing a sweeping plan to cure its German subsidiary.

    Putting previous failed rescue efforts behind them, GM vice chairman and chairman of the Opel supervisory board, Steve Girsky, and recently appointed Opel CEO Karl-Thomas Neumann have embarked on "Drive 2022," a 10-year plan to put Opel back in the black.

    Among the details of the Drive 2022 plan, noted Girsky, is a focus on examining variable profit, fixed costs and cash flow. "You start to unpack these problems," he said. "What drives variable profit? Material costs and revenue and you set up work streams around that."

    A big factor in the push to cut costs will be the relationship with alliance partner PSA Peugeot Citroen.

    After GM's previous unsuccessful alliance with Fiat, some industry analysts have questioned the wisdom of the partnership with PSA, which has severe financial problems of its own. But Girsky and Neumann maintained that the PSA deal is a smart move.

    "PSA was a great opportunity for us in terms of logistics and purchasing savings and good platform sharing," noted Neumann. "Together we will be second-largest purchaser of auto components in Europe."

    According to Girsky, "This relationship is more balanced than was Fiat. PSA will be doing as much for us as we do for them."
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    Re: Drive 2022: Neumann touts Opel's 10-year plan

    It's good to have a 10 year plan, but they need to focus on a 1 to 2 year plan to make sure they are rightsized for profitability. They only indicate mid-decade for profitability. That means 2016 at the earliest. They are giving themselves too much time.

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    Re: Drive 2022: Neumann touts Opel's 10-year plan

    Five or six years ago sales levels in Europe were strong, added Girsky. "Those people will eventually need to replace their cars. Our goal is to be prepared for that so when they do replace, they do so with our products."
    My thought exactly. Turn-around is inevitable, the question is how fast will the European car market recover and will it be able to reach that 14.5 million mark again from the current 12 million sold in 2012...

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