“Vice Chairman Steve Girsky, GM’s second-highest-ranking executive, will become chairman of the Opel supervisory board. Tim Lee, president of GM’s international operations, and financial chief Daniel Ammann also will join the Opel board, the company said.”
Supposedly, GM was surprised and appalled that the European business hit GM’s bottom line with an operative loss of $292 million in the third quarter, despite increased sales. I am not surprised at all. I have always warned that restructuring Opel and cutting jobs is an expensive exercise. And those costs were mostly delayed into the third quarter.
Now Girsky and his team of handpicked hatchet men are coming. Girsky is a former Morgan Stanley banker who came to GM to assure Wall Street. The drooping chart of the GM stock requires a lot of reassurance. Girsky is one of the men the Occupy movement has on its target list.
What the hit squad from Detroit awaits in Europe shows an article in Automobilwoche [sub]:
“By sending Stepen Girsky as head supervisor of the Adam Opel AG business, GM puts its German daughter on the shortest leash possible. The former Morgan Stanley banker is known as a cost killer and a margin hunter without remorse. GM sends its Number Two to Germany to force a turn-around with American methods.“
„American methods“ are shorthand in Germany for hire and fire, for brutal decisions without finding a consensus with the workforce, for management by buckshot. It doesn’t go down well in a country of codetermination on a basis of parity. I would love to be a fly on the wall in those supervisory board meetings where half of the board is union members who will all claim that they don’t speak English.
The first verbal shot has already been fired. Girsky announced:
“To realize Opel’s full potential, we will continue to optimize its cost structure, improve margins and better leverage GM’s scale.”
That again means plants closures, and possibly Opel production in South Korea. Bochum could be closed. Which will mean more red ink. Did I mention that firing people and closing plants in Germany does not come cheap?
By the way: Someone should tell GM that the Supervisory Board of a German AG cannot direct. It needs to listen to the recommendations of management, it can deny or approve them, but it cannot tell management what to do. Quite possibly, it is part of those “American methods” to overlook that little detail.