Karl-Thomas Neumann has stepped down as chief executive of GM’s European subsidiary Adam Opel GmbH, and his successor, Michael Lohscheller, will have to grapple with how to turn the money-losing ship around under the helm of soon-to-be new owner, Groupe PSA.
“It was a difficult personal decision to not continue with the Opel/Vauxhall team when it transitions to Groupe PSA,” Neumann said. “I am proud of the team for all we have accomplished so far and have no doubt that the move to PSA will make Opel/Vauxhall an even stronger and more successful company in the future. I am committed to completing this transaction and will then take some time to decide what is next for me.”
German newspaper Frankfurter Allgemeine Sonntagszeitung (FAS) reported over the weekend that Neumann was concerned that PSA, owner of the Peugeot, Citroen and DS brands, had under-estimated the growing importance of electric cars.
FAS also said that Neumann might return to Volkswagen, where he had worked until 2013, possibly heading Audi. The premium brand’s CEO Rupert Stadler has come under fire for how he has handled the fallout from VW’s diesel emissions scandal.
“I am looking forward to working together…with the management team to implement a successful future plan for the benefit of all 38,000 Opel/Vauxhall employees and its stakeholders.”—Michael Lohscheller
Meanwhile, PSA said the $2.5 billion deal for Opel could be completed as early as July 31, pending regulatory approval, FSA reported.
Opel has lost around $15 billion since 2000. It continued to book heavy losses under Neumann’s leadership since he took the reins in 2013, despite the progress he made in winding down overcapacity and improving the brand’s image.
Opel booked $257 million in losses in 2016. The car manufacturer, based in Rüsselsheim, south of Frankfurt, and with 10 factories employing 38,000 people around Europe, blamed Britain’s vote to quit the European Union and the weaker pound sterling for last year’s poor performance.
PSA wants Opel to return to lasting profit no later than by 2020 with operating margin goals of 2% that year and even around 6% by 2026.
Lohscheller said that Opel would stay on the current path and continue to gain strength as part of the Groupe PSA. “After the expected closing of the transaction, a new European champion will emerge,” he said. “I am looking forward to the new task and to working together with the management team to implement a successful future plan for the benefit of all 38,000 Opel/Vauxhall employees and its stakeholders.”
Many experts in the industry believe consolidation and synergies are the only way the merger can work, especially as both groups inhabit the same lower-margin, mass volume market and neither can be argued to have aspirational brand appeal or a “unique selling proposition” in one particular area.
“There appears to be plenty of scope for consolidations and synergies between PSA and Opel/Vauxhall given the 1 million additional vehicles it will add to its European production footprint,” according to an IHS Markit spokesman. “The expected phasing out of GM-Opel/Vauxhall technology is not necessarily good news for some of the five component sites in Europe that will be part of the acquisition. However, the new organization is likely to need some additional capacity to produce the new requirement.”