Stmnt re Opel/ GM Europe
General Motors Corp
15 August 2001
Opel and GM Europe Present Interim Report on 'Olympia' Turnaround Project
Russelsheim / Zurich. Adam Opel AG Chairman and Managing Director Carl-Peter
Forster and his colleagues from the Opel Management Board and GM Europe have
presented an interim report on the companies' 'Olympia' turnaround project to
Opel's Supervisory Board, which met in an extraordinary session on Tuesday.
Today, an update was presented to GM's European Employee Forum.
'We identified a host of impactful initiatives aimed at reviving the Opel brand
through more innovative products and through a new and integrated marketing and
communications approach', said Forster. 'Coupled with a plan to restructure the
distribution network, and with measures to improve capacity utilisation and
productivity, we believe we are moving fast to put Opel and GM Europe back on
the road to success'.
The 'Olympia' project is geared towards bringing Opel and GM Europe back to
consistent and sustainable profitability levels as of 2003. In order to reach
those levels, the company will need to achieve revenue and cost improvements in
excess of 2 billion Euros over the next 2 years.
Overall 'Olympia' highlights are currently being discussed with Opel and GM's
European employee representatives. Final decisions will be made and implemented
after input from these consultations is considered. 'We are committed to have a
meaningful consultation process and to continue discussing details with our
employee representatives in good faith before important decisions are made,'
said Forster. 'Today we see a progress update, not final decisions.'
Major initiatives of the revival plan include:
* Putting the newly completed Opel brand architecture in the center of all
future company activities, in order to significantly sharpen and revitalise the
Opel brand. The brand positioning is based on Opel's strong German engineering
heritage and its proven strengths of being a reliable automobile partner who
courageously goes for innovative product solutions. As such, Opel's main brand
pillars are dynamism and versatility, supported by state-of-the-art infotainment
systems and exemplary customer service.
* A consistent and systematic approach to Opel's future product portfolio
planning is being derived from this new brand architecture, resulting in a much
more differentiated and innovative product portfolio across Opel / Vauxhall's
entire product range. To this effect, various expressive special models, as
well as new niche and segment-defining vehicles are being included in the Opel
product portfolio. It has also been decided to consistently build and expand
the successful 'OPC' and 'ECO' sub-brands, which have recently led to exciting
sporty car variants, such as the Astra OPC and the OPC X-Treme show car, as well
as cars like the Astra EC04 - an affordable vehicle solution for ecologically
conscious consumers who do not want to be penalized financially for their
responsible choice. Product-related spendings for Opel will be more than 10
billion Euros over the next few years.
* In support of the product effort, an entirely new and much more focused and
impactful advertising approach is being developed, and will be rolled out
shortly. The intent is to clearly distinguish Opel's corporate and product
communications in the market, in line with the brand positioning.
Concurrently, a powerful visual brand identity update is being defined and will
be gradually implemented as of this fall. Furthermore, a review of the brand's
motorsport and sponsoring activities is currently underway, in order to refresh
and align these efforts to enhance the brand's revival strategy.
* Opel also plans to redefine its entire approach to selling vehicles. Starting
with Zafira in the fall of this year, the company is on an aggressive path to
introduce an expedited order-to-delivery system for its entire range of
vehicles. Customers would be able to take delivery of the vehicle they ordered
to their exact specification, with the dealer and Opel adhering to promised
delivery dates and significantly shorter delivery times. The company also plans
to aggressively continue its leading role in e-sales, as indicated by the
recently announced Opel Webk@uf activity and AOL partnership. Similar activities
are underway at Opel's sister company Vauxhall in the UK.
* In Germany, Opel's distribution setup would be restructured, with the aim of
considerably enhancing the customer interface and sales and service
capabilities, as well as strengthening the profitability of the remaining core
distribution network. Key Opel dealers in Germany were informed today about the
plans. Best practices of the restructuring would be implemented in other
European countries as appropriate.
* Significant attention will be given to aggressively capture downstream revenue
opportunities, for example in the areas of parts and accessories, financial
services, leasing, infotainment, and used car marketing.
'Olympia' is also focusing on reviewing all key business processes in the
company.
As an example, the company is embarking on strengthening its supplier relations.
By partnering with the suppliers and involving them early in the design phase,
Opel is determined to quickly capture and implement innovative supplier ideas
aiming at improving quality, significantly increasing savings in material cost,
and increasing the innovation content of Opel vehicles. A corresponding strategy
to work with suppliers on current products is a cornerstone to the company's
quality improvement and cost reduction efforts.
Also, the company's evaluation of future market demand and the matching
manufacturing capacity planning have been reviewed and, adjusted so that
Opel // Vauxhall can run at a higher capacity utilization rate and operate
profitably.
In addition to measures announced at the end of last year, the overall capacity
of Opel's and GM's European vehicle manufacturing network will need a further
adjustment by some 15%, equaling 300,000 to 350,000 units, by the end of 2003.
In order to implement such a reduction, one major assembly plant would need to
be closed, or alternatively, several facilities would have to be resized.
Independently, every single GME manufacturing plant will have to take aggressive
action to further improve efficiency and productivity levels to reach
world-class standards. A subsequent impact on the company's powertrain
requirements cannot by excluded, but further analysis needs to be undertaken in
cooperation with the Fiat-GM Powertrain joint venture company.
With respect to rationalizing specific stamping, tool & die, and component
operations, it is proposed to look for specialised external partners who can run
these activities as their core business and generate opportunities for future
growth, thus providing a better basis for securing future employment levels. All
plants in Europe are under review in this respect.
In addition, the company is looking for an external partner for its facility
management Business across Europe.
Major restructuring plans are also being developed for the Sales and General
Administration areas in Europe, leading to further reductions in salaried
headcount levels.
'As we made clear at the outset of 'Olympia' a short while ago, some difficult
steps must be taken in order to address the company's current financial
situation,' commented Carl-Peter Forster. 'But at the same time, tremendous
emphasis is being put on initiatives and activities to reposition Opel and GME
for future success and growth. That perspective makes it somewhat easier to make
the sometimes painful decisions that inevitably are part of such a turnaround
situation.'
GM Europe President Michael J. Burns said: 'Carl-Peter Forster and the entire
Olympia team have my full support on both the direction of the proposed measures
as well as the overall approach to the subject. We are committed to work closely
with the employee representatives to find mutually acceptable solutions within
the general framework of the turnaround that needs to be achieved.'
Contacts:
North America;
Toni Simonetti: 212 418-6360 (Pager) 877 456-9864
Mark Tanner: 313 665-3146 (Pager) 888 578-2880
Europe:
Stefan Weinmann: +41+1-828 28 28, Telefax; + 41+1-828 25 64
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