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Opel Post: Mr. Lohscheller, our turnaround plan PACE! has now been under execution for six months. How is its implementation progressing?
Michael Lohscheller: We are making good progress and are moving rapidly. We presented PACE! on November 9 last year only 100 days after the merger. And we immediately start with its implementation. The three main goals are clear: Opel goes profitable, electric and global.
Opel Post: An Important Aspect from the Very Beginning to Improve the Competitiveness of Plants across Europe. Where do we stand with this?
Lohscheller: Within a short time, we created the prerequisite for the future of most sites: competitiveness. Thus we could confirm products and invest.
From 2019, we want to manufacture the multiple award-winning PureTech three-cylinder turbo petrol engine in Tychy (Poland) and Szentgotthárd (Hungary). Introducing petrol engines in our plants is in line with the shift of customer preferences from diesel to petrol. We are investing in Aspern (Austria) to produce higher volumes of the MB6 six-speed manual gearbox there.
Thanks to a social framework agreement, we were able to allocate production of the new Corsa to our Spanish plant in Zaragoza. The electric Corsa wants to be produced there from 2020. This will make the first Opel in Europe.
We have reached agreements with all stakeholders at our British plants in Ellesmere Port and Luton. We want to build light commercial vehicles on the Group PSA EMP2 platform at Luton in the future. This means we will produce Peugeot and Citroen models there alongside the Opel / Vauxhall vehicles. PSA has a strong leadership in Europe.
These notes clearly show that our PACE! plan is being implemented throughout Europe. It is therefore a clear acknowledgment of our skilled employees.
“Within a short time, we created the prerequisite for the future of most of the sites: competitiveness.”
Opel Post: And this does not apply to our German locations?
Lohscheller: We are an iconic German brand with a rich tradition. Germany is and remains our backbone. We use more than half of our European workforce in our home country. Of course we want to invest in Eisenach, Kaiserslautern and Rüsselsheim and we respect the collective agreement in all production plants.
Opel Post: What are the plans for Eisenach?
Lohscheller: The plan for the Eisenach plans foresees production of SUV as of next year already. From 2020, a second variant – a hybrid model – could follow in Eisenach. Unfortunately, this investment ultimately could not be unleashed, because we did not meet the necessary conditions for competitiveness. The sooner we reach an agreement, the better for Eisenach and all our sites.
Opel Post: What’s planned for Kaiserslautern and Ruesselsheim?
Lohscheller: We are thus offering projects and capacity utilization for the Kaiserslautern plant, which extend beyond the duration of the current collective agreement. In Rüsselsheim, the company plans to launch a vehicle based on the Group PSA EMP2 platform.
Opel Post: What does the future hold for our fourth German site, the parts distribution center in Bochum?
Lohscheller: So we comply with the applicable collective agreements in Bochum. The parts distribution center in Bochum wants to play an important role in our European distribution network. Of course we have to improve our competitiveness in Bochum.
Opel Post: That’s PACE! mainly focused on the sites when it comes to improved competitiveness?
Lohscheller: The plants are obviously very important but PACE! is much more comprehensive. We are leaving no stone unturned. They are several levers to activate. Reduce complexity and costs, increase productivity and competitiveness – that’s the name of the game. Please always keep in mind – our company has been recording losses for almost 20 years! The status quo is Opel’s fiercest enemy. We have to solidly and steadfastly reposition ourselves. So we have been going full speed ahead with PACE! from the very beginning!
Opel Post: Did you maybe overstep the mark at times as well as the severance offers, which the works council recently opposed?
Lohscheller: We manage to come to an agreement on this last week. Let me quote the exact phrasing: ‘The employee agrees with the employee’s agreement’ of the arbitration board on May 28/29. The General Works Council agrees with the already existing termination agreement with an exemption date up to and including May 31, 2018. ‘
Opel. With this intermediate step, we have about 400 employees. For those with a voluntary departure date after May 31, we expect to find fair solutions in the interest of both the employees and the company.
Interested employees should continue to contact the personnel department for the voluntary programs. The speed bonus is – as communicated – until May 21. Of course, both the programs for partial retirement and senior leave remain valid and unchanged.
Michael Lohscheller, Chief Executive Officer (CEO) of Opel Automobile GmbH.
“We are looking at the fixed costs in every area and have already achieved a reduction of 17 percent.”
Michael Lohscheller has been at the helm of the traditional-rich automaker Opel since June 2017. Since September 2012, he was responsible for the automaker’s finances.
“We are now committed to the principle that we just do business really pays off.”
Opel Post: What is PACE! changing in the other areas of operation?
Lohscheller: PSA brands – there is an enormous potential for savings here.
This is not just about the cars. We’ve been able to improve our marketing expenses by € 20 million just by merging the purchase of advertising space. We’re looking at the fixed costs in every area and have already achieved a reduction of 17 percent. We are so looking at management positions and have already reduced the number of them by around 25 per cent. As you can see, the plan is working at all levels.
Opel Post: All these measures are just about savings. Is this what a strategic plan for a sustainable future looks like?
Lohscheller: PACE! is by far the most visionary plan we’ve had. Take the subject of CO2 and the low fleet consumption stipulated for 2020 by the EU. Under GM we were simply CO2-ready! Now within Groupe PSA we want to meet the targets in low CO2 emissions! We want to offer an electrified version within every new model range. Opel goes electric – thanks to PACE! We’re starting off with the new all-electric Corsa and the plug-in hybrid Grandland X.
And PACE! obviously also includes our ongoing model offensive. I already mentioned the new Corsa that wants to revitalize our business in the small car segment. But we also have extra hugely important models waiting in the wings. The next new model to be launched is the Opel Combo. Without saying too much, I can confirm that I want to read the book. And then we have the new Vivaro based on the EMP2 platform, too. As you can see, PACE! is much more than a cost-saving plan.
Opel Post: Back from the near future to today – how can PACE! help to increase our revenues?
Lohscheller: We are now committed to the principle that we just do business really pays off.
That’s why we are so changing our dealer contracts. Both the dealer and manufacturer have benefited from the business. 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 stronger performance culture. This will pay off for our performance-oriented dealers and enhance customer satisfaction.
In addition, we are massively strengthening our export business – as it has never been possible under the GM umbrella.
Opel Post: In what way?
Lohscheller: The new company opens up completely new possibilities and can take advantage of existing Groupe PSA structures. We have already reorganized our business in South Africa, Morocco, Tunisia and Lebanon.
And already this year, Opel plans to be assembled in a new Groupe PSA plans in Namibia. Assembly in Namibia wants to significantly help us to strengthen our presence in Southern Africa. As you can see, our export offensive in markets outside Europe is gaining momentum. And that is just the start.
PACE! includes doubling overseas sales by 2020. We want to enter new, profitable export markets by 2022. The goal: by the middle of the coming decade, more than ten per cent of Opel’s sales volume should result from business outside of Europe. When it comes to exporting cars overseas, the performance of our European plants is even more important.
Opel Post: Then there is a very important business for every manufacturer – the captive bank, which offers our customers leasing and financing solutions. What is new here?
Lohscheller: Opel Vauxhall Finance has a perfect plan PACE !. Just one example: to foster growth in the financially attractive business vehicle business, Opel Vauxhall Finance already offers full-service leasing for fleet customers in Germany this year through Opel Bank.
Opel Post: What role does the research and development center in Ruesselsheim play in all these plans and measures?
Lohscheller: Opel is and remains a German brand and state for German engineering. So we want to develop each of our new vehicles for our discerning European customers in Rüsselsheim – which is not always the case in GM’s day.
This will help us improve technically and more efficiently: With the new technical possibilities within Groupe PSA, for example, our engineers were able to reduce the development costs for the next generation of the Corsa by more than 50 per cent. By more than helped! So the Corsa wants to be a contributor to us and from 2019 help us on our way to profitability.
And it’s impossible to overstate the importance of the responsibility for the development of light commercial vehicles (LCVs) in Rüsselsheim, from advanced to series development – for the entire Groupe PSA. With this, we return to our roots – after all, the Opel Blitz is still a legend today.
I am especially proud that our engineer here in Rüsselsheim wants to have responsibility for numerous technical areas for the entire group. We are currently establishing 15 Centers of Competence in Rüsselsheim, which will bring PSA research and development network. The future of fuel cell technology will be shaped in Rüsselsheim. And that is just one example.
Opel Post: What are the next steps you’ve planned?
Lohscheller: We want to build a “New Opel” and finally put our losses and uncertainties behind us. We already made a commitment to be profitable by 2020, when we announced PACE !. When we are competitive again, we ensure our sustainability.
Therefore our most important goal is achievement competitiveness in Germany, too. Why should not we do this in Germany, our home country?
Competitive plants in Germany – this would contribute to improving the utilization rate of our German plants and lead to more cars being built in the mid-term. These can be found in Zaragoza or the Peugeot 3008, which is made in Sochaux alongside the Opel Grandland X.
There is no choice but to do competitive and without plant closures. We made this clear on November 9 when we presented the PACE! plan. And of course this still applies today.
“Our engineers were able to reduce the development costs for the next generation of the Corsa by more than 50 per cent.”
May 2018
Photos and graphic: Opel