Opel’s New Owner Vows to Make What General Motors Couldn’t: Money

Opel’s New Owner Vows to Make What General Motors Couldn’t: Money


Mr. Tavares acknowledged, though, that the challenges Opel faces are immense. “It’s a dramatic situation,” he said, “getting worse day by day.”

PSA, the maker of Peugeot and Citroën vehicles, is taking ownership of Opel at a difficult time for the industry. A rebound in the European car market shows signs of running out of steam, which is particularly a problem for PSA and Opel because they are weak in other markets, like Asia and Latin America, that could help compensate.

A transition to self-driving and battery powered cars is also arriving much sooner than most people in the industry expected because of advances in technology and steep declines in battery prices. Traditional carmakers are having to defend their existing markets while committing resources to the development of new designs.

The investment is a bigger burden for medium-sized carmakers like PSA. With sales of 4.3 million cars a year, PSA — including Opel — will still be less than half the size of Volkswagen, the Renault-Nissan Alliance or Toyota.

Britain’s planned exit from the European Union presents another threat. Britain is one of Opel’s strongest markets and an important manufacturing site.

Mr. Tavares, a native of Portugal who was educated in France, is betting that he can repeat his success at PSA, whose survival was also in doubt when he arrived in 2014 after a career at Renault and Nissan.

Some of the skills he displayed in rescuing PSA could come in handy again. As he did in France, Mr. Tavares will need to cut Opel’s production and development costs while avoiding confrontation with powerful unions.

G.M. executives often chafed at the influence over corporate decision-making that German law grants to labor leaders. There was nearly constant friction with unions. In France, Mr. Tavares worked out compromises with workers that allowed PSA to close a factory and cut thousands of jobs.

He said Thursday that any job cuts at Opel would be done through early retirements or other voluntary measures, and that he did not plan to close any factories. Still, analysts said that cutting costs will be difficult to do painlessly.

“It’s not clear to me that they can do it in the time frames they are talking about,” said Peter Wells, a professor at Cardiff Business School in Wales who follows the auto industry. “It has to be done very quickly.”

One option is to simplify the manufacturing process. By building Opels and Vauxhalls using the same engines, chassis and other key components as Peugeots and Citroëns, Mr. Tavares would be following the same strategy used by large carmakers like Volkswagen.

That company’s three major brands — Volkswagen, Audi and even Porsche — share many parts in places largely invisible to owners, while using different body styles to appeal to various kinds of customers. That approach, also used by the Renault-Nissan Alliance and others, saves money but is difficult to pull off, Mr. Wells said.

“To maintain an appropriate level of differentiation is a black art,” Mr. Wells said.

Mr. Tavares said that, despite the heavy use of French parts, “Opel will remain a true German brand.”

After a presentation by Mr. Lohscheller, the Opel chief executive, that was heavy on PowerPoint slides and corporate jargon, Mr. Tavares delivered what amounted to a much blunter blood-sweat-and-tears speech to Opel’s long-suffering employees and managers.

“I am very sorry to see how much pain has been created in this company for so many years,” he said. “There is no time to waste.”



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