The Joplin Globe, Joplin, MO

Business

January 27, 2014

GM’s Barra promises investment for lossmaking Opel

RUESSELSHEIM, Germany — New General Motors chief Mary Barra is stressing the company’s support for its struggling Adam Opel AG subsidiary in Europe, saying Opel workers will get the job of building a new vehicle at the company’s main plant in Germany.

Barra said it was “no accident” that Opel’s headquarters in Ruesselsheim was the destination for her first foreign trip since become CEO on Jan. 15.

“I thought it was very important to reinforce in person my commitment and GM’s commitment to Opel,” she said during a brief appearance before journalists Monday. She called Opel “clearly a vital part of our company.”

Barra was reiterating the commitment made last year by her predecessor Dan Akerson to turning Opel around after years of losses.

She said Opel’s Ruesselsheim assembly plant would be the site for an all-new vehicle that for competitive reasons she couldn’t name. The plant already produces the Insignia and Astra models. The company is closing another plant in Bochum at the end of this year.

General Motors Co. considered selling Opel to Magna International in 2009 but changed its mind. Akerson went to Germany last year and underlined the Detroit-headquartered automaker’s commitment to turning its European business around by rebuilding its brand image and launching new models.

GM’s goal is now to return Opel to break-even by mid-decade, and is plowing 4 billion euros ($5.5 billion) into GM’s European business. Opel is rolling out 23 new models and 13 new engines over the next several years.  

Barra cited the company’s success with recent models such as the tiny Adam city car and the Mokka small SUV as grounds for optimism. Opel’s market share inched up to 6.8 percent in the European Union from 6.7 percent last year. Still, the division lost money, recording an operating loss of $200 million euros in the third quarter.

Europe’s mass-market carmakers are plagued by weak demand from an economy that is recovering only slowly from a crisis over too much government debt. The economy is growing again but unemployment remains painfully high at 12.1 percent.

 

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