By on November 17, 2010

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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6 Comments on “GM Board Member: The IPO Is Premature...”

  • avatar

    He’s not a “GM board member”. He’s Opel’s union leader. He pushed for the Magna buyout and lost, and he’s still pouting. We’re supposed to be surprised that he’s not saying positive things about GM management?

  • avatar

    He is a member of the Opel Supervisory board, and Vice Chairman. This is the highest board at Opel. He is also Opel’s Union leader. By German law, the unions have 50 percent of the seats on the board.

  • avatar

    Opel is rounding error to the consolidated income statement. The folks in Detroit can channel stuff a few thousand Silverados to hide whatever serious flaw this guy thinks Opel presents to the Q4 earnings report.

    After all… this is still GM.

  • avatar
    John Horner

    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!

  • avatar

    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.

    • 0 avatar

      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.

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