Opel will switch to PSA engines, putting jobs at risk

A large portion of Opel's engine development and production could come to an end in the course of the automaker's restructuring following its purchase by PSA Group. The move may affect thousands of assembly workers and development engineers.

"We will gradually start using PSA platforms and engines for the Opel model lineup," PSA development chief Gilles Le Borgne told Automobilwoche. "This won't happen overnight. It will take a few years."

The withdrawal of some Opel engines could begin soon. Just a few days after PSA bought Opel from General Motors on 12 August, experts from PSA and Opel met for the first time to discuss the status of engine development, Le Borgne said. "All of our PSA engines to this point meet the legal requirements in all the markets where we do business," he said. "And we will ensure that this is also the case for Opel engines."

He left open whether and to what extent PSA would continue to use current Opel engines in the future. "Nothing has been decided." But it is clear that Opel must achieve substantial increases in efficiency in all areas, he said. "Opel will draw on experiences from our own restructuring, so we expect synergies to be gained with every model replacement."

At the same time, payments to Opel's former owner, GM, for rights and patents are a key issue. "We want to dispense with any payments for licensing fees as quickly as possible."

Peter Fintl is the director of technology and innovation at the German subsidiary of the French development services provider Altran, which works closely with PSA. He has a precise understanding of PSA's technology strategy. "PSA doesn’t need Opel’s conventional technology,” he said. “Since both manufacturers are active in the same class, it is likely that the Opel platforms will be gradually decommissioned and PSA technologies introduced." But there are also new opportunities for Opel. "It will be interesting to see how PSA and GM come to agreement on the use of GM's electric and fuel cell knowledge," Fintl said.

An end to engine development and production would affect the Rüsselsheim development centre, a component plant in Kaiserslautern, both in Germany, and plants in Tychy (Poland) Szentgotthárd (Hungary) and Aspern (Austria).

Opel has just invested 210m in a new development and test center for engines and transmissions in Rüsselsheim. The centre, which went into operation last October, employs 800 engineers.

Asked whether PSA still needs the centre, CEO Carlos Tavares said the decision is not up to him. "If the government bans internal combustion engines, then it is my job as company president to obey the regulation."

It is also uncertain whether PSA will continue to need the 3,000 Opel engineers that have mainly worked on GM projects until now. A PSA spokesman said that every future Opel model equipped with PSA components would have to be adapted and tested. That would require many development engineers, he said.

"All Opel models are being developed in Rüsselsheim," Le Borgne said, but there won't be any duplicate development work. "We will create competency centres that have clear responsibilities." But there has been no decision on the competencies that will continue to be based in Rüsselsheim, he said.