Opel Management Board Propose Germany-wide Plan to Strengthen Operations

RÜSSELSHEIM, GERMANY – June 15, 2012: The Management of the Adam Opel AG, IG Metall and the relevant works councils are in active negotiations on an extension of the exclusion of compulsory separations until the end of 2016 and a delay in the implementation of the 2012 tariff agreement (wage increase) for the German metal industry. The talks also include a solution to keep the Bochum plant open and operational until the run-out of the Zafira Tourer. The plant was broadly expected to be closed in 2015.

Management and Works Councils will discuss not only the utilization of Rüsselsheim, Eisenach and Kaiserslautern, but also the future of the Bochum plants. Given the present economic environment and anticipated future demand, the current management plan, subject to consultation, will not allocate further product to the Bochum site after the run-out of the current Zafira.

The Opel Management, IG Metall and relevant Works Councils will continue their talks in the following weeks to reach a comprehensive agreement. The goal is not only to reduce costs, but also to reduce the dependence from importing cars and components. This could also include the production of non-Opel vehicles in European plants.

In addition to these proposed labour provisions, Opel management has developed a plan that will be voted on June 28 by the Opel Supervisory Board, focused on:

Significant investments in the Opel/Vauxhall product portfolio between 2012 and 2016, including 23 new models, 13 new powertrains (including 3 all-new engine families) and more vehicles with green propulsion, like the Ampera. New products will include models in segments where Opel is currently not present, such as the small Mokka SUV, the lifestyle mini Adam and a premium cabrio.

A new product offensive, combined with new sales strategies, which is expected to lead to market share growth. Any growth in market share is intended to complement Opel’s plan to return to profitability through greater operational efficiency and cost reduction.

Developing a new, clear brand strategy that is geared toward both traditional and attainable potential customers and that leads to a more defined brand perception.

Clearly defined plans aimed at reducing material, development and production costs. Opel will more effectively leverage the global GM organization. Opel also sees great synergies stemming from the recently formed alliance between GM and PSA Peugeot Citroën.

A coordinated and clearly defined export strategy in the GM family focusing on important growth markets. This includes plans for rapid market share growth in markets such as Russia and Turkey, a strategy to go from 5,000 to 20,000 annual Opel sales in China in the coming years, and entering further markets such as Australia in the fourth quarter of this year.

Opel CEO, Karl-Friedrich Stracke, said, “We must work towards sustainable positive results for our operations in Germany. Opel needs to adjust its business in a way that enables profitability even in difficult market conditions. With 2012 industry volumes expected to be down 20 percent from demand in the past five years, waiting longer to act would be irresponsible.”

Stephen Girsky, Vice-Chairman, General Motors and Chairman, Opel Supervisory Board, said: “GM fully supports the current plan to strengthen Opel and improve its operational competitiveness. Opel is a cornerstone of our global operations, and I firmly believe we are moving in the right direction.

”Opel works council Chairman Wolfgang Schaefer-Klug said: “The Opel works council members are ready to support the strengthening the Opel brand. The main points of the proposed business plan go in the right direction, but we will still need to hold talks concerning many of them. The readiness of the management to talk about excluding compulsory separations until end 2016 for all German plants was a necessary precondition for this. Our goal is to come to a common solution for Opel and all employees. Opel has huge potential – and we must leverage it together. People at Opel would like to make positive headlines even in difficult market conditions.”

Berthold Huber, Chairman of IG Metall, said: “The agreement that was reached now is a commitment to Opel’s development and an opportunity for its production sites. Both sides demonstrated that they are taking responsibility for the employees. This agreement is only a beginning. Opel has gained time to develop the brand based on the know-how of its employees and to identify a sustainable concept for the future of our all its locations. We expect of management that this is not just lip service but that GM and the Opel management board will support their plans with the necessary investments. We request a perspective for the employees at each site. This is about the big picture, i.e. the future of Opel.”

Opel remains committed to its German heritage. Approximately half of Opel’s investment between now and 2016 will focus on operations in Germany. Opel employs 20,800 people across Germany and more than 40,000 across Europe.