GM Board Member: The IPO Is Premature

Bertel Schmitt
by Bertel Schmitt
gm board member the ipo is premature

Ready to buy some GM share tomorrow? A consummate insider who sits on the board of an important GM company says: Don’t.

Klaus-Franz, Chair of the Opel works council and Vice Chairman of the Opel supervisory board warns: “The IPO is premature. Sure, GM has delivered three good quarters. But he restructuring in Europe must be finished to give investors the visibility they need.”

Franz knows the skeletons hidden in Opel’s closet. In an interview with Germany’s Focus Magazine, Franz gives valuable investment advice to potential GM shareholders. To repeat: “Don’t.”

“Due to the insolvency of GM, many projects were left undone. That’s why Opel is not in good shape. Models like the Astra Convertible, or new engines – everything has been delayed. There was no money for these projects. We have a two year innovation gap. The projects that will be launched in 2012 are impressive . After that, profits will be possible, because the restructuring is behind us.”

One of the problems of Opel is hat GM pretty much locked them into Europe. Other companies can export themselves out of the crisis and weather weak European sales. A sick Opel has to live of a sick European market. Will GM allow Opel to enter foreign markets in a meaningful way?

“I see some movement in that regard, but it’s slow going. We won’t get healthier by getting smaller. Profits come from products and expansion. Opel must be globalized. Russia, China, India are the big topics. We need to be in Russia urgently. GM underestimates the opportunities there.“

Maybe they don’t underestimate the opportunities. But quite possibly, they want to exploit them for Chevrolet, Buick et al, and not for a moribund Opel. Franz still thinks a Magna as an owner would have given Opel more drive, and that GM as an owner is a drag:

“There still is too much red tape and inefficiency. Instead of using the talents of the European engineers for profitable development work, their time is wasted in presentations and discussions of process sequences. Very little has changed in the corporate culture. There still are too many chiefs and only the indians are being reduced.”

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3 of 6 comments
  • John Horner John Horner on Nov 17, 2010

    Franz has an axe to grind and wants to keep throwing sand in the gears of progress. Calling him a "GM Board Member" is in fact a misleading headline, but such seems to be the norm on the 'net these days. Anything for page views!

  • Jkross22 Jkross22 on Nov 17, 2010

    Interesting that the comments have zero'd in on the guy's union ties as opposed to whether what he has said is factually correct. Saying he has an ax to grind avoids addressing his accusation. I wonder if those critical of the article agree with the "GM still has too much red tape/inefficiencies/wasted time/corporate culture problems...." accusations. Again, since it was a faux bankruptcy and the swamp wasn't really drained, but simply skimmed, GM carried forward a lot of off balance sheet baggage that has only slowly been jettisoned.

    • Chris Haak Chris Haak on Nov 17, 2010

      holydonut commented above on Opel's place in the larger GM. Opel is certainly a problem (and a money pit), but Klaus-Franz is narrowly looking only at the IPO as it pertains to Opel's situation, and not GM as a whole. Maybe the IPO is too early, and maybe it's not. Suppose the Q4 results aren't as favorable as Q3's were (which Liddell basically said would be the case); that could very easily drive down the IPO price. Also, I agree with those who contend that this is a misleading headline. He's not a GM board member, he's an Opel Supervisory Board member. There is a big, big difference between the two.

  • Wolfwagen I would rather have an annual inspection that may catch something early or at least the driver can be informed of an impending issue. Government vs private is another issue and unscrupulous mechanics is another.On a slightly different topic is the inspection of salvage or rebuilt cars. In NYS it is strictly to ensure that stolen parts were not used to rebuild the vehicle. I would rather see an inspection to ensure that the vehicle has been properly put back together.
  • PeterPuck For years, Ford has simply reworked existing designs originating from Europe and Japanese manufacturers, not being capable of designing a decent car in the USA.What’s the last clean sheet design from the USA? The 1986 Taurus?And they still can’t manage to get things right.why is this? Are they putting all of the competent engineers and designers on the F150? Is woke diversification affecting them, as some rumours suggest? Are they rewarding incompetence?
  • Brandon What is a "city crossover"?
  • Tassos What was the last time we had any good news from Ford? (or GM for that matter?)The last one was probably when Alan Mulally was CEO. Were you even born back then?Fields was a total disaster, then they go hire this clown from Toyota's PR department, the current Ford CEO, Fart-ley or something.He claims to be an auto enthusiast too (unlike Mary Barra who is even worse, but of course always forgiven, as she is the proud owner of a set of female genitals.
  • Tassos I know some would want to own a collectible Mustang. (sure as hell not me. This crappy 'secretary's car' (that was exactly its intended buying demo) was as sophisticated (transl. : CRUDE) as the FLintstone's mobile. Solid Real Axle? Are you effing kidding me?There is a huge number of these around, so they are neither expensive nor valuable.WHen it came out, it was $2,000 or so new. A colleague bought a recent one with the stupid Ecoboost which also promised good fuel economy. He drives a hard bargain and spends time shopping and I remember he paid $37k ( the fool only bought domestic crap, but luckily he is good with his hands and can fix lots of stuff on them).He told me that the alleged fuel economy is obtained only if you drive it like a VERY old lady. WHich defeats the purpose, of course, you might as well buy a used Toyota Yaris (not even a Corolla).