Opel: Capacity Glut? Us? No Way!

Germany's Chancellor Angela Merkel made appreciative noises over the 4 billion EUR GM wants to invest into Opel through 2016, but gave no indication that she is willing to chip in. Comments from Germany quickly pointed out that the 4 billion earmarked for Opel are chump change compared to the 50 billion Euro budgeted by Volkswagen for the next three years. The development of one car alone costs in the neighborhood of a billion EUR.  Observers surmised that the 4 billion are not on top, but what Opel has to invest anyway to keep halfway alive. According to Bloomberg, "the new spending will focus on developing 23 vehicles and 13 engines to reach a goal of breaking even in Europe by mid- decade."  4 billion barely cover a fifth of that plan. In the meantime, Opel denied rumors that workers are twiddling thumbs at its factories. For months, German media claimed that Opel factories are running at 50  to 60 percent of capacity. Not true, Opel production chief Peter Thom told Reuters.  He said that Opel is running at 70 percent capacity in three-shift operation. "In two-shift operation, utilization is around 100 percent," he told Reuters on Wednesday. If that is true Opel would have not capacity problem at all.  Anything above 80 percent capacity utilization is considered ideal, and three shift operations usually are not desirable.   from The Truth About Cars http://www.thetruthaboutcars.com

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