While making his maiden appearance as the new chief executive officer of PSA Group, the French carmaker, the first question that Carlos Tavares had to answer was whether he was arrogant. He was addressing news reporters at the headquarters of Opel yesterday. Mr. Tavares is also the founder of the company that managed to acquire Opel from General Motors. Other than Opel, he was also able to acquire its Vauxhall brand. He was struggling to answer questions about how he would succeed where GM managers had failed for generations. However, he was unfazed by the accusations that he was full of himself therefore further fueling speculations that he would fail in reviving a company that had not recorded a profit since 1999. As a matter of fact, Opel further revealed that it had racked losses worth $19 billion during this entire time. He was talking in Russelsheim, Germany. He told the reporters that it’s their perception that he was arrogant. He further said that he was very confident that he would succeed in turning the fortunes of the company around. Together with Michael Lohscheller who is the new chief executive of Opel, they told the media that that had a plan that would result in a reduction of operational costs of Opel by 1.1 billion euros. This is equivalent to $1.3 billion. Should the plan succeed, the two said that the company would start recording profits by 2020. This would be possible without necessarily laying off its workers.
However, the new owner said that he was aware that turning the fortunes of the company was a difficult task and referred to it as a dramatic situation. At the same time, he said he was aware of the challenges facing Opel. Mr. Tavares knows that the case for Opel is getting worse day by day. For starters, PSA currently produces Citroen and Peugeot. This is a difficult time to acquire a new company with signs of low steam in the European car market. The fact that neither of these two companies have a market elsewhere beyond Europe makes the situation even direr. The fact that battery powered cars and self—driving cars have arrived at the market earlier than expected is also a challenge to this new acquisition. At the moment, PSA only sells 4.3 million cars every year. Brexit is also another threat for the new deal as the UK was a major market for Opel.