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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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!
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.