Last year General Motors offloaded Vauxhall & Opel after years of failing to make a profit – now it looks as though those losses have caught up with PSA Group.

For the first half of 2018, work hours in Opel’s engineering and administration departments have been cut, while from April, those workers who currently have contracts over 35 hours a week will also have their hours slashed. No confirmation of how many of its 37,000-strong workforce will be affected, or if any workers at Vauxhall’s UK operations will be affected either.

Early retirement plans for older workers and an increase in part-time worker programmes have also been put on the table, while news agency Reuters has reported that managers’ bonuses will be linked to the company’s turnaround plan.

Opel has also revealed that a new joint procurement setup for Opel and Vauxhall has been put in place, keeping it in line with PSA’s other brands, Peugeot, Citroen, and DS, which will increase efficiencies. That change alone is said to make up 30% of Opel and Vauxhall’s planned savings from a combination of cost-cutting measures in the coming years.

At the moment, Opel and Vauxhall’s production costs are as much as 50% higher than those of PSA’s French plants and savings in the region of £1.5 billion are expected. ‘It is our common goal to make Opel competitive,’ said company CEO Michael Lohscheller recently.

A deadline of 2020 has been set for Opel and Vauxhall to return to profit – should that target not be achieved, it could spell bad news for the workforce outside of France, with PSA Group boss Carlos Tavares warning that there could be ‘very serious’ consequences if the German division can’t complete the drastic turnaround required.



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