Opel Sees Restructuring Pay Off
November 24, 2005
Opel, the German subsidiary of hard-hit US auto maker General Motors, is back in the black, after putting into place a savings program that will eventually cost the company 9,000 jobs.
In a report based on internal group forecasts, German business newspaper Handelsblatt said Opel looks set to break even this year. Adam Opel, which comprises solely the German activities, was fractionally in the red, but the Opel brand itself, which includes factories outside Germany, is beginning to make money.
Plant closings in North America
Meanwhile, GM's European arm, GM Europe, is set to have more than halved its full-year losses this year to $300 million (256 million euros) thanks to a year-long restructuring program.
The US auto giant is shutting down a number of plants in North America and slashing 30,000 jobs to help stem its losses, which totalled $3 billion in the nine months to September.
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Only Swedish subsidiary Saab remains in the red, pushing down the carmaker's results in Europe. GM stopped publishing separate earnings reports for its European subsidiaries about a year ago.
The report is positive for GM CEO Rick Wagoner, who desperately needs some good news after announcing plant closings and 30,000 job cuts just days ago.