GM Sends Special Forces To Whip Opel Into Shape

Bertel Schmitt
by Bertel Schmitt

Opel workers and managers are deeply worried: It’s not just cuts that are coming. GM is sending a team of feared slashers. Says the Wall Street Journal:

“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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Pch101 Pch101 on Nov 22, 2011

    I have suspected for some time that GM's plan to deal with Opel includes using Chevrolet (aka the new Daewoo) to replace some or all of it, while marginalizing Opel and reducing European production. This move would seem to confirm my suspicions.

    • See 2 previous
    • Damikco Damikco on Nov 23, 2011

      @daveainchina Daewoo is long dead.

  • Freddie Freddie on Nov 23, 2011

    Isn't Opel the brains behind anything decent or interesting coming out of GM? In the corporation's internal accounting, doesn't Opel get credit for all the Opel designs produced and sold under various GM brand names around the world?

    • Zykotec Zykotec on Nov 23, 2011

      True, but judging by some of GM's actions in the past, I don't think they see the problem in removing a vital organ if that saves them money during the first few months. What many people seem to forget is that GM was never really a car manufacturer. They started out as a holding company, that has it's main business in car manufacturers. All though they have tried to make what was originally very different manufacturers accept standardized production and design and development until we were left with (more or less) Opel, Chevrolet and Cadillac + some rebadges. GM executives don't care, or know much about cars. They are beancounters 'till the end.

  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
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