Despite the swirling snow outside, the boardrooms of German carmaker Opel are tangibly devoid of Christmas cheer right now. Since mid-November, new CEO Michael Lohscheller has been holding regular talks with the company’s works council about cutting employee hours. He’s pushing for an agreement before the holidays, and according to inside sources, there’s tension in the air.
The screws are getting turned on Opel by PSA Group, the French maker of Peugeot and Citröen cars that bought the company from its former American parent General Motors four months ago. Handelsblatt has learned that Opel is set to lose hundreds of millions of euros this year, marking yet another year in the red. Since 1999, it has accumulated losses of about €19 billion ($22 billion).
Announced last month, Mr. Lohscheller’s strategic plan, PACE!, aims to return Opel to profitability by 2020, by combining operations with parent company PSA, and offering electric models of all its cars by 2024. But part of that plan includes cutting personnel hours.
“Opel has to change itself,” wrote Mr. Lohscheller in an internal message to some employees, as seen by Handelsblatt. “It can’t go any other way. We are not capable of competing yet.”
If the CEO cannot find a solution with the works council soon, it could mean much worse than a knuckle rapping from PSA’s Paris headquarters. The affiliated group might then step in and push for severe downsizing. Opel has about 19,000 employees in Germany, and twice that in Europe.