Opel Denies Reports on Plants Running at Half Capacity image

Opel announced that it is currently running at 70% capacity, denying reports that the percentage was lower.

Opel production chief Peter Thom said that currently production is of 70% running in a three-shift operation. With the high amount of fixed costs when producing a vehicle, the percentage of production capacity in plants is of utmost importance to determine earnings. Recent reports in German press said that Opel’s plants in Europe are running at half their capacity level, which would be way under the 80%-85% necessary for an automaker to be profitable.

Last month Karl-Thomas Neumann, Opel’s new CEO, said he can revive the loss-making brand if he gets plenty of help from GM. Neumann became Opel’s CEO on March 1st and said he would have refused the job if he didn’t believe GM executives were committed to investing in the automaker’s turnaround plan. Earlier today GM announced it will invest in its European operations by 2016 to add new models, restore profit and increase market share in the region.

“We’re more convinced than ever Opel will succeed” in its turnaround, Akerson said. “We are also more convinced than ever that GM must have a strong and successful presence throughout Europe, and especially here in Germany.”