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INTERVIEW: Karl-Friedrich Stracke, president of GM Europe

By Glenn Brooks | 4 April 2012

Karl Stracke

Karl Stracke

Following three years as head of global vehicle engineering for General Motors, Karl Stracke returned to his native Germany in January to become president of Opel and Vauxhall. As he explained to Glenn Brooks, future products are key to making the company profitable again.

j-a: Opel and Vauxhall are now rolling out the Ampera. What are your ambitions for that model?

KS: We are very proud of the Ampera having just won European Car of the Year and we have 7,000 orders for the car so we're very happy about that. In fact, we think we should sell 10,000 Amperas this year but maybe more. We are also proud of new compact SUV, the Mokka, and this puts us in a very strong position for what we see will be a very fast growing segment. And then we also have our sporty new Astra (OPC as an Opel, VXR as a Vauxhall) so you see that we continue to keep launching new, additional products to strengthen our brands.

j-a: Where was the Mokka engineered and what are your production goals?

KS: Mokka has been engineered by Opel but production is in Korea. I think an annual production goal of 50,000 or more is realistic but we will see.

j-a: It can't be helpful for your efforts to restructure the company when GM and Opel board members are openly criticising Opel and Vauxhall in the media.

KS: We want to keep this in the future internally and, yes, these comments have been made. Obviously we need to prove ourselves with measures and actions and my preferred solution would be to discuss these things inside the company only. That is what out strategy will be.

j-a: Still the rumours continue that Opel and Vauxhall will be sold.

KS: No, clearly no. This is not the case. We are highly integrated within GM and the idea of us not being part of GM is the wrong strategy. Once the Magna deal was over and the sale of Opel cancelled, all the work that quickly took place was focused on keeping us in the GM network. And now in Europe, the alliance with PSA will be very important for us to show further improvements in terms of costs and also for our product portfolio, where we can share many things. There is now, with PSA, a big opportunity to bring even better products to the market, and faster.

j-a: Could you expand upon Opel and Vauxhall's plans for what you have hinted at recent European motor shows will be more electric vehicles?

KS: With the RAK e concept, we see that 'mega-cities' continue to grow, so in places like Shanghai we should see more demand for new solutions and we will be ready with new applications of our e-mobility vehicles. Opel was a world leader in bicycles in the 1920s so we should look to our heritage and bring that forward to maybe e-bikes (Opel premiered just such a concept, the RAD e, a plug-in commuter bike, at the recent Geneva motor show - ed) for our future e-mobility strategy.

j-a: We are seeing a lot of publicity for Opel's 150th anniversary this year. Where does the company go from here?

KS: We must return the company to profitability. That is the biggest goal, and we are working hard on that.

j-a: So how will you make Opel-Vauxhall profitable again?

KS: We are not leaving any stone untouched. Every cost is being looked at, and of course every opportunity for more revenue. And by the way, we have engaged every key stakeholder in this: the unions, the works council, everybody is highly engaged in what we want to accomplish.

j-a: But when will the company be in the black again?

KS: We always said it would take some time, and so we must work according to our plan. There is no date to announce.

j-a: And what about the brand images of Opel and Vauxhall. Are you satisfied with where they are?

KS: I tell you, you can never be satisfied. But the image of our brands has improved, and this is proved by data. We are also now starting to promote our image aggressively through new campaigns for the Ampera.

j-a: You spoke a moment ago of the need for extra revenues. Are you considering exports to the US?

KS: I would say that increased exports to many global markets is part of the game. There are all types of ideas: another is producing cars for other (GM) brands which we are pursuing right now. There are no limits to our ideas if it makes economic sense. We will begin exporting cars to Australia in September; we have big plans for China. We are already very successful in Russia and improved market share there by 1% and the same target is for this year.

j-a: You've talked about this year being an important one for Opel, but what about the future of the Vauxhall brand?

KS: Ellesmere Port and Luton are both very important production plants for us. Vauxhall is a big portion of our business. As you know, we have close to 12% market share in the UK. I am very proud of Vauxhall and we are looking forward to an even stronger future.

j-a: So you can't imagine a future without Vauxhall?

KS: No.

j-a: Do you mean both the brand and the production plants?

KS: First of all, I am talking about the brand. As for plants, I won't comment on the speculation that I know is in the media. We are in negotiations right now and for sure we will make the right decisions for the company.

j-a: Why do you think an alliance with PSA will succeed when the former tie-up with Fiat ended in a divorce?

KS: The culture is very good between us. (GM and Opel board member) Steve Girsky and the team have set up this deal and they are working very well with PSA. It is a balanced agreement, which was not necessarily the case with other alliances. So one cannot outpace the other in terms of business advantages - whatever we do in terms of architecture sharing or some other cost reductions, it needs to be balanced and make sense for both companies.

j-a: You've announced your first collaboration with PSA will be a new, low cost platform. Does that mean you're going to have a big push into emerging markets?

KS: I think the important point here is the timing with model cycles and so on. That means that it makes the best business sense to start with this architecture around 2016.

j-a: What else can you tell us about the plans for the alliance? Will PSA get access to the Ampera's powertrain?

KS: Right now this is all mostly internal so I don't want to give away our plans to our competitors. The Ampera is not yet part of the deal. We want to share opportunities in R&D, purchasing, logistics and potentially other areas in order to improve our costs. I would also add that we will remain competitors with the PSA brands.

j-a: Will GM Korea continue its engineering work for Opel-Vauxhall?

KS: GM Korea is doing excellent work with products in for example the A and B segments and we want them to continue.

j-a: The current Corsa uses a Fiat-Opel platform and the new Opel Combo is made by TOFAS-Fiat, so will there be more projects with Fiat?

KS: Steve Girsky needs to discuss all future development programmes and I know that he talks to Sergio (Marchionne) but I don't know about the status of any current talks.

j-a: Another small car is the Junior project, your rival for the Fiat 500. What are your ambitions for that car?

KS: Huge, huge. This will be a new segment for us and so that means new customers. But I don't want to talk any more about Junior as it is too early right now.

j-a: How about other additional products above where your currently most expensive model sits today?

KS: I think we need something above the Insignia to boost the image of the brand. But having said that, don't make any mistake: the focus of our team is to really get Opel and Vauxhall back to profitability and the product pipeline we have is already really good. I have some plans for a new halo model but it's too early to say.