The summary execution of Opel chief Karl-Friedrich Stracke, and the mess this has created, is front page material in the German press today. The fingers point in the direction of Detroit. Detroit has no clear strategy and changes directions like soiled underwear. The fingers also point at an impulsive Dan Akerson who is out of his depth.
According to Germany’s Handelsblatt, the firing of Opel chief Karl-Friedrich Stracke went down like this:
“GM boss Akerson arrived on a flash visit in Rüsselsheim and had a look at the latest numbers. When he found a deficit in the three digit millions in the business plans, he blew a gasket. The impulsive CEO fired Stracke out of hand – and left a mess in Rüsselsheim.”
The paper calls the reaction “as thoughtless as it its typical for the former Navy officer Akerson.”
The German edition of Financial Times says that “it signals everything else than hope when the cost cutter is fired in the middle of the cost cutting.”
The usually well-informed Frankfurter Allgemeine Zeitung opines: “It doesn’t improve matters when continuously new disturbances are caused in the company. It demotivates the staff and does not make for better sales.”
The GM stock is at an all-time low. If you bought the stock at the IPO, you are $15 under water. The market is worried about the never-ending losses in Europe. GM’s main sponsor Obama is up for re-election, and should he lose, there will be a big backlash in Detroit. This puts pressure on Akerson, and he seems to be cracking under pressure. And what is a panicking Akerson to do? There probably isn’t a single day where Akerson does not loathe Fritz Henderson who changed his mind on selling Opel after the deal was done. The bigger the stress, the more palatable the solution to dump Opel and get it over with. Reuters cites the former GE boss Jack Welch, who once said that if a company didn’t measure up, the only options were to “fix it, sell it, or close it”.
Reuters says today that GM is only a “step away from giving up on Opel for good.” Reuters cites Ferdinand Dudenhoeffer, Germany’s talking head for automotive matters, who said:
“The worst is that GM frequently changes course. Until yesterday the strategy was to guarantee jobs through 2016, today it is making cuts and closing plants as quickly as possible. This will be the last such attempt under Akerson and since GM couldn’t sell Opel last time, they will just wind it down if they can’t fix it.”
“Opel’s problems won’t be solved by managing it on the basis of quarterly results. Either the owner adopts a long term strategy and sticks to that plan or it looks pretty damn bleak for the brand in the future,” Andreas Halin, Managing Partner of GlobalMind Executive Search Consultants in Frankfurt and an expert on corporate management, told Reuters.
Reuters thinks that Opel workers will quickly find a job elsewhere. A headhunter told the wire service:
“I know that the other German manufacturers are wringing their hands looking for qualified workers. I am sure Opel employees would be open to being poached by a competitor and if I worked at Opel – whether I was a manager, engineer or assembly line worker – I would immediately send my application to Volkswagen or BMW.”
To the apologists who say it is all the European market’s fault, and not so bad after all, the Handelsblatt has this advice:
“Other makers such as Fiat, Ford, or Peugeot suffer from the weak market. However, no automaker is navigating such a crash course as GM. The decline of Opel was not caused by the crisis of the market alone. It was also caused by a management malfunction. “
The Handelsblatt did award Dan Akerson the “Pinoccio of the Day” for saying: “We appreciate Karl’s many contributions to GM’s success.”