"The way ahead is clear now to put firm measures into
place for this futurecooperation as quickly as possible" The aim is to complete the
legal formalities for setting up the planned joint-venture holdings with Fiat in the
Purchasing andPowertrain Components areas before the end of the summer period, and for
these new limited-partnership companies in Germany to commence operations by the end of
the year.
Just under 4,500
members of the Adam Opel AG workforce will transfer to the new joint-venture companies.
Almost 1,200 of them will be from the engine andtransmission plant in Bochum, 1,200 from
the two engine plants in Kaiserslautern, 1,500 from the International Technical
Development Center and about 500 from European Purchasing in Ruesselsheim. The company
clearly stated that it would not dismiss employees due to the formation of the joint
ventures. The individual joint ventures in Germany will continue to have a joint works
council at the various Opel locations. In accordance with co-determination, wages and
salaries, company old-age pensions preservation of acquired rights and social welfare
areas, employees will continue to be treated as if they were employed by Adam Opel AG.
Robert W. Hendry
emphasized that the strategic alliance with Fiat Auto's brands Fiat, Alfa Romeo and Lancia
would create worthwhile synergies that would have a positive and lasting effect on Opel's
profitability. The production volume represented by these partner-companies, more than
four million passenger cars worldwide, would in itself enable definite cost benefits to be
achieved in the purchasing area. The synergies that would be attainable in a few years'
time in the powertrain area would be potentially even more significant. Opel and Fiat both
have access now to each other's very latest technologies and would be able to tackle
future development projects together. Hendry estimated that the joint annual cost benefit
would be in the region of 2.5 billion German Marks after three years, rising to about four
billion Marks after five years. The partnership with Fiat, he said, would enable Opel in
future to develop and produce additional models that the brand needed in its product
program and as a means of enhancing its brand image. Hendry: "Opel will most
certainly achieve considerable new strength from this alliance."
Despite the
immense importance of the alliance for the company, the CEO declared that Opel's corporate
strategy would not be changed. "I am convinced that a strong, unmistakable brand
profile is the key to Opel's future". We have therefore made great efforts to build
up a clearly defined brand structure that will enable Opel to continue its progress."
As a further prime objective of his strategy, Hendry mentioned the continuation of the
product offensive started two years ago with the launch of the latest Astra model. With
the Astra Coupe, the Astra Eco 4, the Agila microvan, the Speedster as a no-compromise
sports car, the latest generation of the successful Corsa model, the Omega V8 as the
forthcoming top of the range model and a whole series of new engines and developed
versions of existing ones, Opel had introduced, or was about to introduce, more new models
than in any comparable period in its history.
Robert W. Hendry
undertook to maintain investments at a high level in the future. "In the next five
years Opel will invest some nine billion Marks in Germany, with about five billion devoted
to new products. We regard this high level of expenditure as an investment in our future.
Attractive models will enable us to improve both our market shares and our
profitability." In 1999, Hendry pointed out, Adam Opel AG had increased its research
and development expenditure by more than 17 percent.
Also speaking in
Frankfurt, Finance Director Hennig A. Klages explained that this increased expenditure was
one of the reasons why the company ended the 1999 fiscal year with an operating loss of
225 million Marks (compared however with a shortfall of 344 million DM in the previous
year), in other words an improvement of 119 million Marks. The deficit in the 1999
accounts was accordingly 81 million Marks. In the current business year the company was
making every effort to achieve a positive result, said Klages, with certain of the
structural measures initiated in the meantime starting to take effect. The German new car
market remained an uncertain factor, however; it had begun the year weakly and was likely
to remain below the original volume forecasts.
At 32.02 billion
Marks (previous year 30.26 billion Marks), Adam Opel AG broke its annual turnover record
in 1999, with an increase equivalent to 5.8 percent. In Western Europe, passenger car
sales went up by 81,000 units or 5.2 percent. With sales of more than 730,000 in Europe as
a whole, the Astra was the top-selling car in any class. The Opel/Vauxhall market share in
Western Europe rose slightly from 10.90 to 10.94 percent. Sales ex-factory to dealers and
importers rose in 1999 by 5.1 percent to 1,170,000 units. In Germany, Opel achieved
525,000 new registrations, only just failing to equal the previous year's result (533,000
units).
Its market share
fell as a result from 14.3 to 13.8 percent.
In the first five
months of 2000, the high-volume manufacturers had to accept a reduction in sales volume
averaging 18 percent on account of the sluggish demand for new cars, where manufacturers
in the luxury market segments were able to maintain their sales. During this period, Opel
booked 183,000 new registrations (226,000 in 1999), equivalent to a 12.2 percent share of
the market (13.5 % in the previous year).
In Europe as a
whole, the Opel brand was largely able to compensate for the domestic market's weakness,
with considerable increases in sales in France (+ 16.9 percent), Italy (+ 9.5 %), Spain (+
22 %) and Central Europe (+ 23 %). In the words of Opel's CEO Robert W. Hendry: "This
trend encourages us to believe that we shall be able to make good the generally weak
demand on the domestic market by increasing our exports."
(June 19,
2000) |
