GERMANY: Opel $11bn investment to secure profitability by 2012
Opel/Vauxhall said the announcement today (9 February) of its EUR11bn (US$15.1bn) investment to 2014 should see the automaker break even next year and return to profit in 2012.
The massive cash injection will come from Opel's business activities and is separate from requested government loans or guarantees, a GM spokesman insisted to just-auto.
"The EUR11bn investment comes from profit we make from selling cars - it comes from the bottom line," he said."
There had been discussions of EUR9bn investment some two years ago, but today's financial plan now replaced that. "There has been a lot of water under the bridge since two years ago," said the spokesman. "That EUR9bn two years ago was investment [in] Russia [for example] but that is not in the new plan."
Opel is now undergoing the process of requesting some EUR2.7bn from various European governments, given the difficulty of obtaining credit from the markets, and which is in addition to the EUR600m parent GM provided. This will be used for restructuring including a 20% capacity reduction requiring 8,300 job cuts.
"The European Union [EU] has introduced a programme so that companies can access funding from their governments," said Opel/Vauxhall CEO Nick Reilly at a Frankfurt press conference called to announce the investment plan.
"It is not just Germany, we have gone to the UK, Spain, Austria and have had [a] reasonably good response."
Reilly ruled out significant further liquid injection from GM noting its finance was "essentially US taxpayers' money," following its bankruptcy last year and that it was "not surprising" the Americans would expect European governments to help with a European entity.
Reilly added Opel's loan submission to the German government had just been made, saying the amount was confidential, but that if the German authorities wanted to make that public, "then fine."
And given the fact some 60% of Opel's headcount is in Germany, Reilly said there would be an approximate allocation of the EUR2.7bn on the basis of that division.
The Opel boss also stressed the manufacturer was continuing to talk to with unions to implement the 8,300 job losses that will include shutting the Belgian plant in Antwerp. "We are still negotiating with our employee representatives," said Reilly, adding: "I fully realise the necessary role of unions in these difficult decisions.
"In the end we both want the same thing - a successful company."