General Motors roundtable
At the 2013 IAA, Frankfurt motor show, there were roundtables full of GM-Europe executives and journalists. The plan, dubbed Drive! 2022, was revealed in 2012 by GM-Europe acting president Steve Girsky. Girsky is also the person that dubbed a group of folks directed to study Tesla, Team Tesla. When asked what he thought of Tesla Girsky said that Tesla sells only 20,000 unit’s annually, but if they only sell in CA they could be a real competitor.
Fifteen years in a row GM-Europe has lost market share, but GM has to be in Europe, just as the Europeans have to be in America to be considered a global player. Girsky talked about the new team he put together in Europe that would define a new normal. Some of the executives worked, some were shown the door. GM-Europe was out of time, hope was not a strategy.
GM’s CEO Dan Akerson has always said that he is committed to seeing Opel flourish. Akerson upped the ante by investing more than 4 billion Euros in Opel as it rolls out new powertrains and develops a new small car platform with GM partner Peugeot.
The goal of Drive! 2022 is to be profitable by mid-decade. It’s a far cry from the days of Clare McKichan, the first head of Opel design from 1962 to 1967. Opel was the first car company to have a design center and the first manufacturer to show a concept car at Europe’s IAA Frankfurt motor show in 1964-1965.
Fifty years after Opel Stylist Erhard Schnell designed the Opel GT, and it was produced at the Bochum, Germany assembly plant, Opel’s management board has officially voted to close the Bochum assembly plant by the end of next year.
When Girsky hired Karl-Thomas Neumann, president of GM’s European operations, away from Volkswagen he gave him the Latin quote that when translated means “we will find a way or we will make one”. Hope was not a strategy.
Neumann said Opel’s goal is to continue to stifle losses by closing the Bochum plant, idling some shifts, cut administrative costs, streamline processes, and partner with PSA to work on the purchasing side. “Opel has lost market share, basically, over the past fifteen years. We would like to take market share back. This year, in an extremely competitive year, we were able to stabilize that situation.” Opel’s market share is 6.2 percent. In order to show a profit by 2016 Neuman says they will need to increase market share. Hope is not a strategy.
January 2013 was a bad month for Opel. It’s never a good sign when the board of directors descends upon you as they did on Opel in April, it’s worse when you know that the last time it happened was 25 years ago, when the Berlin wall fell.
The team has saved the company but they haven’t made it great yet. Girsky says that there are green shoots sprouting. It is now time to go on a strong product offensive. Malcolm Ward, Opel GM Chief Designer, says that Opel will launch 23 new models and 13 new engines in the next 2 years.
There’s a misery index, it’s the number of people that would not buy an Opel no matter no way. Previously Opel was the 22nd ranked brand out of 22, in August 2013 that number had risen to 20. The team hopes to capitalize on the pent-up demand of the customer with the 14-year-old vehicle, the average age of a vehicle in Europe. The key to doing that, said Girsky, is to create positive incentives, not negatives ones that destroy the product.
Could Opel export to other countries, such as China? Girsky says there’s just not the latitude to do that when a company is losing $5 million a day. Opel is in Israel, Russia. The Mokka (think Buick Encore) will be built in Spain, an incremental way of extricating itself from Korea. You won’t see the Opel moniker in the United States, but you will see the Buick c-segment have common parts with Opel. The Buick Regal and Opel Insignia being good examples.
According to the European Automobile Manufacturers Association (ACEA), “In September, demand for new cars in the EU* was up 5.4%, amounting to 1,159,066 units, from the record low volumes registered in September 2012**. The month counted on average one more working day across the EU this year, compared to the last. From January to September, new car registrations declined by 3.9%, compared to the first nine months of 2012, with a total of 9,000,629 vehicles.”
Opel looks about average for the industry, down for the year, up for the month of September, they are climbing back. January-September, 2013 shows a market share of 6.9% and for September 2013, a market share of 7.5%. GM-Europe, which includes Chevy, shows 8.1% and 8.5% market share for the previously stated periods.
It’s what Opel was hoping for and hoping it’s not just an anomaly.
Enjoy the video of random shots from the 2013 Frankfurt auto show and from around Frankfurt, Germany.
