Opel plant in Rüsselsheim
So far, no Peugeot models have been manufactured at the German carmaker’s plant.
Munich It is an appeal that gives an idea of how great the need is Opel must be straight. “Please advertise our models in your families and among your friends,” demanded CEO Michael Lohscheller the car maker’s workforce recently hosted a virtual townhall meeting.
The manager turned to each one. “Please help personally – and take advantage of the attractive conditions for employees. We at Opel drive Opel! That is now more important than ever. ”The reason for Lohscheller’s insistent words: In April alone, sales of the brand with the flash in the core market of Europe slumped by 90 percent.
The corona crisis is hugely affecting the traditional Hessian company. Production in the domestic vehicle factories in Rüsselsheim and Eisenach has been at a standstill for a good two months, although the restart should take place “promptly”, but a quick recovery in business is unlikely. Many employees may have to work short-term until September.
“We will need staying power,” warns Lohscheller. At the same time, according to Handelsblatt information, the two-meter man wants to ensure a little confidence within the troop in this difficult time. While rivals like Renault announcing plant closings, the secret plan of the 51-year-old plans to invest millions in order to produce a third model in Rüsselsheim soon, according to corporate circles.
Specifically, in addition to the Insignia sedan and the Astra small car, the Opel parent plant will also have a vehicle from its portfolio for the first time from mid-2021 of the French parent company PSA (Peugeot, Citroën, DS) roll off the assembly line. The car will belong to the compact class and on the EMP2 platform from PSA be built. The move that should lead to more employment could be officially announced in the next few days.
“We will shortly be providing detailed information on investments in the Rüsselsheim plant and a new vehicle allocation,” Opel confirmed the information in writing. “The aim is to focus on vehicle production with higher volumes.”
For Lohscheller, the approval of the PSA model is not only a prestige success, but also helps to provide the chronically underutilized assembly plant in Rüsselsheim with more work. In addition, Opel will finally benefit from the principle of so-called “cross-manufacturing”. Because while Peugeot factories have also long since been producing Opel brands, this has not been the case up until now. This one-dimensional alignment should now end.
Factory parts are closed
The news, however, should not have been received too enthusiastically by the Opel workforce. After all, Lohscheller is planning new cuts in the parent plant in the same breath. The construction of M1X six-speed gearboxes and forgings is scheduled to end by the end of 2021. Subsequently, the areas in which around 200 employees are currently working will be completely closed down, according to corporate groups. The employees concerned may then be retrained partly for vehicle production and partly receive severance packages.
In the future collective agreement concluded in 2018, Opel assured employees that they would invest billions in maintaining the stock and securing employment. Ultimately, however, unions and works councils cannot prevent individual closings, but rather delay them as much as possible.
The end of gearbox production in particular is bitter for many experienced Opelans. Since the car manufacturer began assembling vehicles in Rüsselsheim more than 120 years ago, transmissions have also been produced here in an independent part of the plant. There is also great concern among the workforce that further areas could be closed in the medium term. After all, employees in parts construction, the press shop, postage production or tool making have been complaining about missing investments for months.
“You won’t recognize the location in two or three years,” fears a trade unionist. In Rüsselsheim, more and more depth of added value is being lost, the only investment is in vehicle assembly. Some people see the location gradually deteriorating into an “extended workbench”. Not least because Opel as a result of the planned merger of PSA and Fiat Chrysler could also lose the development expertise for light commercial vehicles in the group.
But it’s not that far yet. Especially since other insiders consider it sensible to produce components and vehicles separately from one another in specially specialized factories. Either way, Opel is shrinking continuously under the French reign. Since the Rüsselsheim company was taken over by PSA in summer 2017, sales and sales of the brand have been declining. In addition, Opel front man Lohscheller has sealed the dismantling of more than half of the once over 19,000 employees in Germany in the past three years.
From the management’s point of view, these cuts are indispensable. Because without the tight restructuring, Opel would no longer exist, the management argues. In fact, Lohscheller’s team managed to trim the once chronically loss-making car maker for profit. In 2019, Opel achieved a record profit adjusted for special effects of EUR 1.1 billion.
Opel’s flagship becomes the store keeper
The shock waves of the corona pandemic, however, now hit Opel harder than some of its competitors. While about VW Thanks to its global presence, the volume of sales slumped to 28 percent in the first four months, Opel sales fell by almost half in the same period. The reason: Hessen deliver nine out of ten vehicles in Europe, so they hardly benefit from the market recovery in China, the world’s largest sales region.
The Opel flagship Insignia in particular is becoming less and less popular. Even before Corona, the limousine suffered from customer loss. While 71,000 Insignia were sold in 2018, it was only 51,000 in 2019. At the beginning of the year, the downward trend continued inexorably. Insignia sales dropped 57 percent in the first quarter.
In view of these massive declines, some Opel insiders doubt that the planned production of the PSA model in Rüsselsheim will really create additional jobs. In the end, the third car in the main plant could primarily serve to compensate for the ever smaller workload at Insignia, according to corporate circles.
More: Power struggle in Wolfsburg: mistrust of VW boss Diess is growing