Tuesday, General Motors' unit Opel announced a five-year plan to invest €11 billion to reinvigorate 80% of Opel/Vauxhall carlines. The company plans to seek about €2.7 billion from the European governments. As a part of its restructuring process, the company also plans to reduce capacity by 20% across Europe, which would result in about 8,300 job cuts. Under the plan, Opel/Vauxhall aims to break even by 2011, and be profitable by 2012.
"Today's announcement marks the beginning of a new era for Opel/Vauxhall. It is the biggest overhaul in the company's recent history," said chief executive officer, Nick Reilly.
Under the €11 billion investment plan, the company would require long-term funding of €3.3 billion to run the business during the transformation. Opel's parent company, GM, has already provided €600 million for the new Opel/Vauxhall business. GM also provided €650 million in advanced payments in January to ensure appropriate cash positions.
Opel/Vauxhall will seek secure funding of about €2.7 billion through loans or loan guarantees from European governments. With the assessment from its external auditor, the company today formally applied for loans or loan guarantees from the German government.
Opel/Vauxhall plans to reduce its capacity by more than 20% from 2007. As as a result, the company will reduce about 8,300 jobs, including includes 1,300 in sales and administration and 7,000 jobs in manufacturing.
As previously announced, the company also intends to close the Opel production facility in Antwerp, Belgium in the course of 2010. After the capacity reduction is implemented, the company is expected to run at about 112% of its capacity on a two-shift basis and 87% on a three-shift basis.
The company has also eliminated the former GM Europe management structure in Zurich, Switzerland, and is now managed from the Opel brand headquarters in Rüsselsheim, Germany.
Under the viability plan, the company plans for eight major launches in 2010, and another four in 2011 in Europe.
Opel/Vauxhall said it will spend €1 billion in innovative and fuel-efficient powertrain technology to introduce a range of new green products, including an extended-range electric vehicle in addition to the Ampera, pure battery-electric vehicles in smaller-size segments, expanding LPG and CNG applications, start/stop technology and right-sizing of engines.
At the start of 2010, Opel/Vauxhall witnessed some positive outcomes for its efforts thus far.
The company maintained a 2009 market share of 7.59% in Western Europe in spite of some tough price competition. Opel increased its market share and regained the number two position in its German home market, while Vauxhall remained number two in the United Kingdom.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.