Thursday, December 10, 2009
GM Europe's New Boss, Nick Reilly, Says Opel Mini Car a Top Priority, Will Be Disappointed if Germany Doesn't Give Financial Support
Speaking to reporters during a conference call on Saturday, GM's newly appointed President of its European operations, Nick Reilly, made several statements concerning the present and future of Opel / Vauxhall. Among other things, Reilly, who is also in charged for Chevrolet Europe, said that a new mini car is a top priority for Opel / Vauxhall and that the Ampera hybrid (Opel's version of the Chevy Volt) will be manufactured at some point in Europe.
In regards to the financial aid for Opel / Vauxhall, Reilly said that while GM has sufficient money in the U.S, it cannot spend a significant amount on its European operations for a number of reasons including that much of that money will be used for Delphi and completing restructuring in the States, and of course, to pay back the government loans.
Reilly added that GM expects to get financial support from most European governments for Opel / Vauxhall and that the company would be "disappointed" if Germany is the only country which does not participate.
According to reports, GM's restructuring plan includes 8,500 job cuts from its 50,000-strong European workforce in order to return to profitability by 2012.
*Pictured above: Opel Trixx Concept
Statements by Nick Reilly, President, GM Europe:
On his President, GM Europe title:
"The reason for the GME President title is because we want to be consistent. We have three Presidents in our organization going forward: one for North America, one International (AP & LAAM) and one for Europe. We will not have a return to the former GME organization. There will be two organizations in Europe: Opel/Vauxhall and Chevrolet Europe. I will be accountable for both, run Opel/Vauxhall while Wayne Brannon will continue to be in charge of Chevrolet Europe." (As background, Wayne Brannon reported to Nick Reilly in the past when he was GMIO President and will continue to do that now as President GM Europe.)
On the question of an Opel/Vauxhall CEO:
"I will be CEO, so we have called off the search. I will also be responsible for other GM business in Europe."
On the Opel / Vauxhall management team:
"I will be announcing a new management team next week, but I won't comment on any individuals at the moment."
On the Opel/Vauxhall product portfolio:
I see gaps which need to be filled. Opel needs a mini; that will be our top priority. I want to clarify that we will also need to continue with light commercial vehicles, that is a reasonable share of our business.
On alternative powertrain technology:
"We can take advantage of global technology and look at introducing hybrids. Ampera will be manufactured in Europe. Initially, the car will be imported from the US, but long-term, we are looking for a local source. Ellesmere Port is one of the candidates, but there are others. Also, we will look at battery technology. Electric vehicles will increase the focus on that."
On Friday's meeting in Brussels:
"It was a positive meeting. We need €3.3 billion in total of which €1 billion is for restructuring. The rest primarily will be for investments in new products. We expect to lose money in 2010, so we will need some support to get through next year. I am not sure when a decision will be made, but I've been getting positive responses. The aid will be in line with national and EU rules. No date on when to expect a decision."
On the need for government support:
"There is a belief out there that GM has sufficient money in the U.S. that it can spend in Europe. That is not the case. Much of that money will be needed for Delphi and completing restructuring in the US. We also have some of that money in an escrow account for disasters in the US and we can't touch that.
Third, the US market remains depressed and we have to have some money to get us through 2011. We also need to to the US government. Finally the money is US taxpayer money. We can use some of it outside of the US but not all."
On government support from Germany:
"We've prepared an application for the German government. They were willing to support Magna deal, so we expect some support for our plan. Financial aid is no different from other car companies in the US or Japan or other European countries.
I am optimistic they will come forth with aid … but regardless, the German government decision will not lead to more or fewer lay-offs in Germany. The expectation is that we will get financial support from most European governments. We would be disappointed if Germany is the only country which does not participate."
On the Antwerp facility:
"Until we finalize our discussions, we won't make any comments. We will and are looking for alternatives. But bear in mind, we must reduce capacity and we must reduce structural costs. We had plans and an agreement in place, but some plans can't come true in view of the changing business environment. You see in the U.S. how many plants had to be shut down – and there were probably product plans for each one of them. To be sustainable, we must reduce capacity."
"We hope to make an announcement in the next 2-3 weeks. Anticipate before the end of the year or possibly beginning of next year."
On alleged export restrictions for Opel:
"Let me be quite clear. Opel has no restrictions for exporting. It already has a small but loyal business in China. It attempted to sell in India, but didn't build the necessary reputation, was losing money and pulled out. Same with Japan.
The key is, if a good brand can make money what would stop us from exporting? We will look at opportunities market by market. If it requires building the brand, that is very difficult to do. We will not enter into an export program just to add volume. We must be able to make money; otherwise we won't do it."