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Opel Post: Mr. Lohscheller, half a year now our turnaround plan PACE! in front. How does it work with the implementation?
Michael Lohscheller: We are making good progress. We are driving at a fast pace. Already 100 days after the merger, on the 9th of November last year, we have PACE! presented. And then it went immediately to the implementation. The three main goals are clear: Opel becomes profitable, electric and global.
Opel Post: An important aspect from the beginning was to significantly improve the competitiveness of the plants across Europe. Where do we stand here?
Lohscheller: In a short time, we have laid the foundation for the future of most locations: competitiveness. So we can promise and invest products. From 2019 we will manufacture the award-winning three-cylinder turbo petrol engines “PureTech” in Tychy, Poland and in Szentgotthárd, Hungary. The construction of new gasoline engines in our plants also reflects the change in customer behavior away from the diesel to the petrol engine. We are investing in Aspern near Vienna to produce larger quantities of the MB6 six-speed manual transmission there.
Thanks to a social framework agreement and the resulting improved performance of the plant, we were able to award the production of the new Corsa to our plant in Zaragoza, Spain. From 2020, the electric Corsa will also be available here from the production line. This makes it the first of our plants to produce a purely electric Opel in Europe.
We also reached agreement with all parties involved at our British sites Ellesmere Port and Luton. In Luton, we will build light commercial vehicles on Groupe PSA’s EMP2 platform in the future. In other words, we will manufacture Peugeot and Citroën models side by side with Opel and Vauxhall vehicles. This is a milestone for the future of the plant and a crucial prerequisite for achieving our ambitious goals in this important vehicle segment – a segment in which Groupe PSA is the European leader.
These decisions clearly show that our PACE! Plan is being implemented throughout Europe. It is also a clear recognition for our qualified employees.
“In a short time, we have laid the foundation for the future of most locations: competitiveness.”
Opel Post: Does not this apply to our German locations?
Lohscheller: We are a traditional German brand. Germany is and will remain our backbone. We employ more than half of our European workforce in our home country. Of course, we also want to invest in Eisenach, Kaiserslautern and Rüsselsheim and keep collective bargaining agreements in all production plants.
Opel Post: What are the plans for Eisenach?
Lohscheller: The plan for the Eisenach plant plans to produce an SUV as early as next year. From 2020, a second variant – a hybrid model – could follow in Eisenach. Unfortunately, the investment has not been released so far because we have not achieved the necessary conditions for competitiveness. The sooner we reach an agreement for Eisenach and for all locations, the better.
Opel Post: What is in Kaiserslautern and Rüsselsheim?
Lohscheller: We also offer projects and capacity utilization for the Kaiserslautern plant that go beyond the duration of the applicable collective agreement. In Rüsselsheim, the plan is to produce a vehicle in the D segment based on the Groupe PSA EMP2 platform.
Opel Post: What about our fourth German location, the goods distribution center in Bochum?
Lohscheller: We are also in Bochum to the applicable collective agreements. The Bochum goods distribution center will continue to play an important role in our European network in the future. Of course we also have to improve our competitiveness in Bochum.
Opel Post: standing at PACE! So the focus is primarily on the locations when it comes to improving competitiveness?
Lohscheller: Of course the works are very important, but PACE! is much more comprehensive. We turn over every stone. There are many solutions. Reduce complexity and costs, increase productivity and competitiveness – that is the motto. Please always keep in mind – our company has been in the red for almost 20 years! The status quo is our biggest opponent. We have to set up new and weatherproof. So we at PACE! – which means speed – from the beginning full throttle!
Opel Post: In the process, have you even overstepped your goal, as in the case of compensation offers, against which the works council has last spoken?
Lohscheller: We were able to reach an agreement last week. I quote here the exact wording: ‘The employer undertakes to do so until at least the conclusion of the next meeting of the conciliation office on 28/29. May not enter into or cancel a termination agreement with employees, or obtain the signatures of employees for such termination agreements, or offer redundancy compensation for self-termination of employees. The General Works Council agrees to the already existing termination agreements with exemption / exemption date up to and including 31.5.2018. ‘
With this intermediate step, we can respect the willingness of the approximately 400 employees who have opted for a career opportunity outside of Opel. For those whose voluntary resignation date is after May 31, we will find good solutions in the interest of the employee and the company at the next meeting of the arbitration board.
All interested employees can continue to contact the Human Resources Department for advice on the volunteer program. The speed bonus continues as announced until 21 May. Of course, the two programs for partial retirement and senior leave continue to be valid.
Michael Lohscheller, Chief Executive Officer (CEO) of Opel Automobile GmbH.
“We have already reduced our fixed costs by 17 percent across all areas.”
Since June 2017 Michael Lohscheller leads the Opel Automobile GmbH. Previously, he was responsible for the finances of the Rüsselsheim car manufacturer since September 2012.
“We are now consistently following the principle that we only do business that really pays off.”
Opel Post: What moves PACE! in the other functional areas?
Lohscheller: In purchasing, we have fundamentally repositioned ourselves within the group of companies in order to achieve economies of scale together with the other brands of Groupe PSA – there is tremendous potential here.
It’s not just about the vehicles. By purchasing advertising time alone, we were able to improve the efficiency of our marketing spend, worth 20 million euros. In each area, we look at the fixed costs, as we have already saved 17 percent across all areas. And we do not stop at the executives: the number of management positions has already been reduced by around 25 percent. You can see on all levels: The plan works.
Opel Post: All these measures are just savings. Does such a strategic planning for a sustainable future look like?
Lohscheller: PACE! is by far the most visionary plan for Opel for a felt eternity! Take the topic of CO2 and the low fleet consumption required by the EU in 2020. Under GM, we would have had to pay huge penalties, because we were simply not CO2-ready! Now within the Groupe PSA, we will meet these requirements for low CO2 emissions. We will offer an electrified version within each new series. Opel becomes electric – thanks to PACE !. Let’s start with the all-electric new Corsa and the plug-in Hybrids Grandland X.
In addition, PACE! our ongoing model offensive continues. I have already called the new Corsa, which will enliven our business in the small car segment. In addition, we have other important news in the pipeline: The next new model on the market will be the Opel Combo. And I can already tell you that the launch of Combo Life is imminent. In addition, there will soon be the new Vivaro, which also builds on the Group platform EMP2. You see, PACE! is much more than a pure savings plan.
Opel Post: Back from the near future to the present – how can PACE! help to increase our income?
Lohscheller: We are now consistently following the principle that we only do business that really pays off. That’s why we also implement our dealer contracts. Both need to benefit from the business equally – dealers and manufacturers. We terminated the old contracts punctually at the end of April and plan to sign the new ones as soon as possible. This creates a better performance culture. This will pay off for our performance-oriented dealers while improving customer satisfaction.
In addition, we are massively strengthening our export business – as it would never have been possible under the GM umbrella.
Opel Post: To what extent?
Lohscheller: In the new group we have completely different possibilities and can use existing structures of Groupe PSA. We have already reorganized our business in South Africa, Morocco, Tunisia and Lebanon.
And already this year, Opel models will be assembled in a new Groupe PSA plant in Namibia. The production in Namibia will significantly help us to further strengthen our presence in the south of Africa. As you can see, our export offensive on markets outside Europe is gaining momentum – and that’s only the beginning.
PACE! envisages a doubling of sales overseas by 2020. We will open up new, profitable export markets by 2022. The goal: By the middle of the coming decade, more than ten percent of Opel’s sales volume outside Europe will be realized. For these overseas exports, the performance of our plants is particularly important.
Opel Post: Then there is another essential business for every manufacturer – our own bank, which supports our customers in leasing and purchasing finance. What happens here new?
Lohscheller: Also at Opel Vauxhall Finance there is a strategic plan, the PACE! perfectly completed. To give just one example: in order to support growth in the financially attractive business, Opel Vauxhall Finance plans to offer full-service leasing for major customers this year through Opel Bank in Germany.
Opel Post: What role does the R & D center play in all these plans and implementations?
Lohscheller: Opel is and remains a German brand and stands for German engineering. We will also develop each of our new vehicles for our demanding European customers in Rüsselsheim – which was not always the case in GM’s day.
In doing so, we will be even better in terms of technology, but also more efficient: in combination with the new technical possibilities within the Groupe PSA, our engineers have been able to reduce the development costs for the next generation of the Corsa by more than 50 percent. About half! Thus, the Corsa will become an economically important car for us and help us from 2019 on our way to profitability.
And what we can not overestimate is the fact that the responsibility for the development of light commercial vehicles comes to Rüsselsheim, from the advance development to series production – and for the entire Groupe PSA. We return to our roots, after all, the Opel Blitz is still a legend today.
I am particularly proud that our engineers here in Rüsselsheim are already responsible for the entire group in numerous technical areas. We are currently establishing 15 so-called centers of excellence that bring in typical Opel strengths in the development network of Groupe PSA. So Rüsselsheim will get the responsibility for the development of fuel cell technology. And that’s just an example.
Opel Post: What are the next steps you are planning?
Lohscheller: We want to build a “New Opel” and finally draw a line under our continuing losses and uncertainties. We already looked at the release of PACE! known to want to be profitable by 2020.
That is why our most important goal is to set the course for competitiveness in Germany as well. Why should not we succeed in our home country?
Producing competitive locations in Germany – that would contribute to a higher capacity utilization and then we could produce more vehicles here in the medium term. These could be cars of all brands of the Groupe PSA, as well as in Zaragoza also Citroën models are built and in Sochaux the Peugeot 3008 side by side with the Opel Grandland X off the line.
There is no other choice: we have to become competitive – and we want to do this without redundancies and plant closures. We made that clear on the 9th of November when we released the PACE! Plan presented. And of course that applies today too.
“Our engineers have reduced development costs for the next generation Corsa by more than 50 percent.”
As of May 2018
Photos and graphics: Opel