Stellantis chief calls for Opel cost overhaul

Carmaker Opel must cut costs to be competitive, its CEO said as the German brand plots a new course within parent Stellantis, opens new tab, leaning on a partnership ​with China's Leapmotor, opens new tab and a new model for its Ruesselsheim factory.

Germany's strengths ​are in engineering quality and its location at the heart ⁠of the European market, but energy and labour costs are an issue, ​Chief Executive Florian Huettl told Reuters at Opel's headquarters.

"We must not stop reducing ​our production costs and automating our processes to remain competitive," Huettl said.

Europe's legacy carmakers are also battling increasing Chinese competition. Stellantis's tie-up with Leapmotor will serve as a test case ​for whether such partnerships with potential competitors can solve plant capacity issues ​and close the technology gap.

"We have very high hopes for this partnership," Huettl said, adding ‌that ⁠the companies are on track for a two-year development timeline on their jointly produced electric SUV under the Opel brand.

Stellantis announced a €60 billion ($70 billion) strategy in May, focusing the bulk of investment on Jeep, Ram, Peugeot and Fiat, while Opel ​serves as a ​regional brand. Part ⁠of that strategy is the electric SUV with Leapmotor, set to be produced alongside Opel's Corsa at its Zaragoza ​plant in Spain.

Stellantis also announced last month that the successor ​to Opel's ⁠Astra model would be manufactured in Ruesselsheim, where the group employs 6,800 workers, as part of a €1 billion investment package for Germany.

Ruesselsheim, one of Germany's oldest ⁠car plants, ​is currently operating one shift per day rather ​than two or three.

Job cuts announced in April will reduce the number of engineers at the ​site by 40% to 1,000.

-Reuters