Vauxhall & Opel – no plant closures before 2014

Will the new Mokka help GM in Europe

GM in Europe are not having an easy time of things, with both Vauxhall and Opel struggling for sales as the car market in Europe polarises and the mainstream car makers struggle.

GM have made some moves to consolidate their European operation with a co-operation agreement with Peugeot Citroen, but that deal has more of a sticking plaster feel to it than a real way to fix the issues of over-production in a difficult European market.

There have been rumours recently that GM were looking to pull the plug on Vauxhall’s Ellesmere Port plant and Opel’s plant in Bochum in Germany. In fact, news had been expected as early as Wednesday when Opel’s supervisory board is due to consider the options for cutting costs.

But GM Europe President Karl-Friedrich Stracke has told Germany’s Bild that there will be no factory closures imminently because there is a clear agreement in place to keep all GM’s facilities in Europe open until at least the end of 2014.

Despite having their hands tied on factory closures – which is at least temporary good news for Vauxhall and Opel – Stracke has said that reviewing wages is on the agenda and GM Europe are looking to expand sales in China, Australia and China to help and are looking at marketing campaigns to strengthen brand image.

Sales in new markets may help, and if GM could re-position Vauxhall Opel as a sub-premium marque – something like Volvo – then that to could have an impact.

But there’s no escaping the fact that GM in Europe lost around £450 million in 2011 with sales in the first two months of 2012 down by 20 per cent and market share around 15 per cent lower.

There’s no easy fix for GM’s Vauxhall and Opel.