Opel, which includes Vauxhall in the UK, should strive for an operating profit
margin of 4-5 per cent within four years, Nick Reilly said in his first
interview with an English-language newspaper since he recently came to the
helm of Opel.

"If we are successful we should be at least 4-5 per cent. Four to five
per cent gives a good return on investment and capital … It shouldn’t take
more than four years," the GM stalwart said.

Analysts labelled as "ambitious" Mr Reilly’s operating profit margin
aim – a common measure in the industry that measures profit before tax,
interest payments and depreciation in relation to revenues.

Arndt Ellinghorst, head of automotive research at Credit Suisse, assessed it
as a "highly risky plan". He said: "In the best case, when
the product cycle is peaking and car demand is booming, a mass market
carmaker can reach a profit margin of 4-5 per cent."

The year 2010
Mr Reilly said Opel would face "another tough" year in 2010, when
government-sponsoredscrapping incentives round Europe expire. He said the
carmaker aimed to break even by 2011 and make a "decent" profit
from 2012.

GM made a strategic U-turn six weeks ago in opting to retain its European
operations instead of selling them to Magna, a Canadian car parts company.

Mr Reilly aims to present a €3.3bn ($4.7bn) restructuring plan that foresees
about 8,500 job cuts European-wide by mid-January.

The former head of GM's international operations emphasised that the plan was
not only about capacity reduction. He said Opel had an "exciting
product line-up", replacing 80 per cent of its models within the next
three years.

There were also two opportunities in the small car segment, which is seen as
one of the few growth markets for volume carmakers.

Continue with the Agila
He said Opel would continue with the Agila, which it builds in co-operation
with Japan's Suzuki, while it would develop on its own "a stylish small
car for younger people".

Opel's focus should be Europe, Mr Reilly said. But he said the carmaker could
later expand to South America, the Middle East or other parts of Asia.

Mr Reilly was optimistic that Opel would get the funding it is seeking from
European governments to part-finance the restructuring plan.

Talks with the unions on cost cuts were also progressing, after the German
works council had laid aside initial disappointment over GM's decision to
keep Opel.

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