It may be coincidence or it may be destiny, but the lightning bolt in Opel’s logo now appears to define the future of the German carmaker under its new French owners. PSA Group, the maker of Peugeot and Citroën cars in France, announced a radical restructuring of the iconic German brand just three months after taking it over, with a focus on electric cars and expanding to global markets. And it is also supposed to start making money again.
PSA Chief Executive Carlos Tavares acknowledged Thursday that the company, which has cumulative losses of €19 billion ($22 billion) since 1999, continues to operate at a loss. But he pledged that Opel would realize savings of €1.7 billion from synergy between the two companies by 2024 and return to profit by 2020. Mr. Tavares is due some credibility for his claim after turning around the French automaker in just three years and bringing it from near bankruptcy to become one of Europe’s most profitable companies.
PSA acquired Opel from General Motors in August for $2.2 billion. The move allows Opel to shift production from GM components to PSA platforms and technologies, giving it a much better chance of meeting the stiff new carbon emissions targets announced by the European Union this week.
Mr. Tavares and the new Opel CEO, Michael Lohscheller, pledged to offer electric or hybrid versions of all Opel models by 2024 and to open up a score of new markets abroad. Under GM, Opel had developed only one electric car and was banned from selling in markets with another GM brand.
“We are much better off with the French than with the Americans.”
The executives emphasized that design and production would be conducted at Opel headquarters in Rüsselsheim, because they are eager to preserve the “Germanness” of the brand. “If we give developers room to breathe, then they will build autos with a German character,” Mr. Tavares said. Rüsselsheim, rather than Detroit, will become the center of Opel’s world, he added.
Opel is one of the oldest carmakers in the world. Founded in 1862 to manufacture sewing machines, it moved on to bicycles and then made its first car in 1899. By 1931, GM had acquired total ownership and kept Opel as its primary European subsidiary until last summer. The first version of the logo with a lightning bolt in a circle was introduced in 1964, inspired by the company’s Blitz (lightning) line of light trucks. For decades, Opel was a cash cow for GM, matching Volkswagen in volume and maintaining significant market share in Germany.
Opel has had a fitful history in the United States amid decades of strategic confusion at GM headquarters in Detroit. The Opel Kadett competed with the VW Beetle as a small-car import from Europe, but GM missed chances to import bigger and better Opel models. The confusion became complete when the US automaker labeled the imports Buick Opels.
Mr. Tavares and Mr. Lohscheller did not disclose all 20 of the new markets they are targeting for Opel, but China and Brazil were mentioned as places GM had banned for Opel. PSA also acquired the British Vauxhall in its purchase of Opel after GM had largely merged the two operations in the 1970s.
Opel has shed 30,000 workers over the past several years and the executives pledged not to make any further layoffs, though the workforce is likely to decline a few thousand more further through attrition. The company is counting on cost savings from economies of scale in components, concessions by labor on wages, and streamlining the model lines – going from nine platforms to two, for instance, and 10 engine groups to four. The savings should make production profitable at 800,000 units a year, compared to the €250 million lost on sales of 1.2 million units last year.
The new link to the French automaker is what makes the shift to electric possible, because PSA is much further advanced in developing e-mobility than GM. “We are much better off with the French than with the Americans,” said Wolfgang Schäfer-Klug, head of Opel’s works council. He added that the union had been pushing for years for better planning on e-mobility through its representatives on the Opel board.
The sole electric car in the Opel lineup is the Ampera-E, which is a rebadged Chevy Bolt manufactured in Detroit. It was previewed at last year’s Paris auto show with great fanfare, but now is unlikely to make a big impact on the European market as Opel switches to French technology. PSA’s takeover of Opel may not have been a “coup de foudre” for either side, but the future of the lightning-bolt logo is electric and lies in French hands.
Lukas Bay, Stefan Menzel and Martin Murphy cover companies and markets for Handelsblatt. Darrell Delamaide is a writer and editor for Handelsblatt Global based in Washington, DC. To contact the authors: email@example.com, firstname.lastname@example.org, email@example.com and firstname.lastname@example.org.