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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Germany is a long way from the action in China and Vauxhall and Opel badges stick to anything just like Chevy, Buick Caddy do. Korea is central and a lot more user friendly Hyundai seems to do ok. The Russians are buying used car companies right now but be in qwik you gotta a handy site in Germany.
According to an interview to Dan Akerson, recently published on a europena newspaper, he said that "it was a good thing we didn't sell Opel". Care to elaborate on that, Mr Akerson? Truth is, GM should rebadge everything in Europe to Chevrolet, or just come up with an entirely new brand (scion for example), slowly deplete Opel lineup and pass it over to the new brands, and then close Opel alltogether. Opel has way too much production capacity in Europe, but they are in denial about the necessity to close factories and letting people go. I would just keeo the R&D and design studio open, as that is a good policy and allows GM to keep tabs on european specifuc taste, but everthing else is really not necessary.