According to German daily paper Bild, Karl-Thomas Neumann, the automaker’s chief executive officer, has already told its top managing team that the European division of the No. 1 US automaker, GM, might fail to reach its intended profit return target in 2016.
General Motors, itself just freshly recovering from the last economic crisis, has opted to focus in Europe only on Germany’s Opel and its UK sister company Vauxhall, making the historical decision of pulling Chevrolet out of the region. It also pushed the goal of returning to profit on the continent by 2016. “We see strong headwinds for 2015,“ says the paper, citing a letter sent by Neumann to 300 of the division’s senior managers. “Our next step, ‘Profitability 2016′, is by far not secured,” he was quoted adding.
The European arm has seen Opel CEOs coming and leaving in a rapid succession, and GM has made its top priority returning the regional carmakers to profitability, after the company endured some $18 billion in losses over 12 years. Neumann has the task to at least get back to profit the Opel division by 2016 and then go on raising the earnings before interest and tax (EBIT) operating return on sales to 5% by 2022.The program faces headwinds from the current sales situation in Russia, Opel’s third largest market in Europe.