Opel forecasts huge turnround: GM fills post rejected by Lopez for VW deal

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The Independent Online
ADAM OPEL, the European subsidiary of General Motors, yesterday forecast a dramatic improvement in earnings this year after plunging to a DM503m ( pounds 205m) group net loss in 1993 from a net profit of DM259m in 1992.

David Herman, Opel's chief executive, described 1993 as the 'worst year in decades for the automobile industry'.

On the strength of a much better performance in the first half of 1994 he said the turnround had been established. He stopped short of predicting Opel would return to the black for the full year, despite having made a profit in the first half, because of continuing heavy restructuring charges and uncertainty about the recovery.

Opel's vehicle sales fell by 22.5 per cent to just over one million, while turnover shrank by 21 per cent to DM23bn in 1993. The company said its German market share slipped to 16.6 from 17.7 per cent. Opel's 1993 loss was largely responsible for a halving of earnings at GM Europe.

Mr Herman predicted Opel's sales would rise to around DM26bn this year. He said the company's new Omega executive model was extremely well received by the market since its April launch.

The company plans to shed a further 2,000 staff this year after cutting back its workforce by 6 per cent in 1993 to 50,810.

General Motors named its finance director, Richard Wagoner, as head of its struggling North American car-making division - a post it offered to Jose Ignacio Lopez de Arriortua shortly before he defected to Volkswagen last year, writes Larry Black in New York.

GM's chief executive, John Smith, had run the troubled division since the company directors ousted his predecessor, Robert Stempel, in early 1992. Mr Smith plans to devote more time to overseeing GM as a whole.