Opel: No factory closures or layoffs

One hundred days after buying German carmaker Opel-Vauxhall, French auto giant PSA announced on Thursday that it has no plans to close its Opel factories for the time being, and that the jobs of its 19,000 staff in Germany will be protected.

Instead the company said it would achieve the efficiencies necessary to turnaround the struggling car brand by offering early and partial retirement and the use of flexible working time arrangements. PSA said it will need to work with trade unions to avoid operational redundancies.

Part of the plan would see the "necessary and sustainable reduction of labor costs," Opel's CEO Michael Lohscheller admitted. But he went on to envisage growth through expansion, targeting 20 new export markets for the brand by 2022.

The company unveiled its strategy to return the Opel-Vauxhall brands to profitability at an event at its headquarters in Rüsselsheim near Frankfurt on Thursday morning.

2020 deadline

PSA said it would utilize the technology and resources of the parent company to help Opel break even by 2019 and record a profit by 2020. By then, it expects some 1.1 billion euros will be saved.

It plans to shave some 700 euros from the production cost of each car, and will need to sell some 800,000 vehicles to return to profit.

New electric models were planned for each of its models by 2024, the company added. Within three years, four models will have electric versions including the next Corsa.

Savings would be made in marketing and general administrative costs, Lohscheller said.

Opel and its British sister brand Vauxhall were bought from General Motors for 1.3 billion euros ($1.5 billion) in August after the US giant was unable to turn a profit from the European carmaker for 17 years.

Opel-Vauxhall employs some 38,000 people around Europe, around half of them in Germany.

Some analysts had estimated that some 6,000 jobs would need to be lost to achieve the same productivity as PSA.

Earlier this week, the German newspaper Frankfurter Allgemeine Zeitung said Opel would likely begin a hiring freeze and offer early retirement and severance packages to staff, and that a more large-scale retrenchment exercise would probably take place later, if required.

New owner still growing

PSA announced stronger third quarter revenues last month, mostly due to its core brands of Peugeot, Citroen and DS. Group wide revenues grew 31.4 percent to 15 billion euros ($17.6 billion) in the period from July to September.

However it warned that sales had stalled almost 29 percent to 89,700, amid a more pronounced 43 percent slump in the first nine months of the year.

It sold some 677,800 vehicles worldwide in the third quarter, but didn't say how many of those were Opel/Vauxhall branded.

mm/... (AFP, AP, dpa, Reuters)