GM Sends Special Forces To Whip Opel Into Shape
Opel workers and managers are deeply worried: It’s not just cuts that are coming. GM is sending a team of feared slashers. Says the Wall Street Journal:
“Vice Chairman Steve Girsky, GM’s second-highest-ranking executive, will become chairman of the Opel supervisory board. Tim Lee, president of GM’s international operations, and financial chief Daniel Ammann also will join the Opel board, the company said.”
Supposedly, GM was surprised and appalled that the European business hit GM’s bottom line with an operative loss of $292 million in the third quarter, despite increased sales. I am not surprised at all. I have always warned that restructuring Opel and cutting jobs is an expensive exercise. And those costs were mostly delayed into the third quarter.
Now Girsky and his team of handpicked hatchet men are coming.
What the hit squad from Detroit awaits in Europe shows an article in Automobilwoche [sub]:
“By sending Stepen Girsky as head supervisor of the Adam Opel AG business, GM puts its German daughter on the shortest leash possible. The former Morgan Stanley banker is known as a cost killer and a margin hunter without remorse. GM sends its Number Two to Germany to force a turn-around with American methods.“
„American methods“ are shorthand in Germany for hire and fire, for brutal decisions without finding a consensus with the workforce, for management by buckshot. It doesn’t go down well in a country of codetermination on a basis of parity. I would love to be a fly on the wall in those supervisory board meetings where half of the board is union members who will all claim that they don’t speak English.
The first verbal shot has already been fired. Girsky announced:
“To realize Opel’s full potential, we will continue to optimize its cost structure, improve margins and better leverage GM’s scale.”
That again means plants closures, and possibly Opel production in South Korea. Bochum could be closed. Which will mean more red ink. Did I mention that firing people and closing plants in Germany does not come cheap?
By the way: Someone should tell GM that the Supervisory Board of a German AG cannot direct. It needs to listen to the recommendations of management, it can deny or approve them, but it cannot tell management what to do. Quite possibly, it is part of those “American methods” to overlook that little detail.
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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I have suspected for some time that GM's plan to deal with Opel includes using Chevrolet (aka the new Daewoo) to replace some or all of it, while marginalizing Opel and reducing European production. This move would seem to confirm my suspicions.
Isn't Opel the brains behind anything decent or interesting coming out of GM? In the corporation's internal accounting, doesn't Opel get credit for all the Opel designs produced and sold under various GM brand names around the world?