GM's German Patient: No More Mr. Nice Guy
Last year, GM’s German patient, Opel, hemorrhaged $1.6 billion. It could easily have been twice than that, if Nick Reilly had fired the more than 8,000 workers that are on Opel’s endangered species list. Letting people go can get very expensive in Europe if you are a going concern. The only factory that was closed was Antwerp, to the tune of $532 million. That came to a little bit over $200,000 per worker. Reilly didn’t want to rain on the IPO roadshow, and moved the mass firings to this year. GM’s thank you: Reilly was fired.
Well, not quite. According to Reuters, Nick Reilly retains the (mostly ceremonial) title of Head of European Operations at GM, and he will be named Chairman of the Opel supervisory board.
The man who’s calling the shots at Opel is the German Karl-Friedrich Stracke. Stracke is an engineer, and an Opel lifer. He started there in 1979. Since 2009, he was head of global R&D at GM. According to Automobilwoche [sub], Stracke is “a master organizer and well versed on both sides of the Atlantic.” His new job will most likely be the biggest challenge of his life.
In America, GM CEO Dan Akerson is getting impatient. He wants the hemorrhage to stop. The problem is, it won’t stop without a huge bloodletting. According to German media reports, Akerson “put the gun to Stracke’s head” and demanded 1,200 workers at the Bochum plant to be gone by May, something Opel denies.
In Bochum, nobody wants to go. Offers of up to $363,000 in golden parachutes found no takers. Even offers to move from not quite picturesque Bochum to Rüsselsheim (not on Germany’s romantic route either) were not accepted – despite an extra payment of $35,000. The workers in Bochum are digging in for more.
When the 1,200 workers in Bochum have been disposed of in an environmentally responsible fashion, the work will not be done. Not at all. 4,800 jobs have to go in Germany, 8,000 in Europe. It won’t come cheap.
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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