The summary execution of Opel chief Karl-Friedrich Stracke, and the mess this has created, is front page material in the German press today. The fingers point in the direction of Detroit. Detroit has no clear strategy and changes directions like soiled underwear. The fingers also point at an impulsive Dan Akerson who is out of his depth.
According to Germany’s Handelsblatt, the firing of Opel chief Karl-Friedrich Stracke went down like this:
Opel’s stand-in boss Stephen Girsky demands changes from his workforce. “Our successful revitalization demands from all of us that we accept to do business differently than before, and that we do it quickly,” Girsky wrote in an email to staff, cited by Germany’s BILD Zeitung. How different, remains unsaid. Workers and unions expect a fight and gear up for one. Opel is running out of money. Bankruptcy rears its head.
After putting Opel CEO Stracke abruptly out to pasture, one would think that his (allegedly interim) successor Steve Girsky has a new plan to rescue Opel and to spare GM shareholders further losses. Not so. The new man will keep the old plan. “GM fully supports the current plan to strengthen Opel and improve its operational competitiveness,” a spokesman for Opel told Reuters.
The Opel mess claims another victim. “Opel’s Karl-Friedrich Stracke stepped down from his position as chief executive of the embattled carmaker to take on “special assignments”, where he will report to the Chairman and CEO of parent General Motors,” Reuters says.
A lot of the Opel news seen below emanated from an all hands meeting at Opel’s ancestral home in Rüsselsheim. Opel CEO Karl-Friedrich Stracke explained the restructuring plan for Opel. According to German media reports, Stracke delivered more questions than answers . According to Reuters Germany, “the management of the lossmaking GM subsidiary did not contribute to a heightened confidence of employees.” The impression is that the management has no plan.
If you are anxious to hear what Opel is going to do to stop the bleeding of money (just in case you are holding GM stock,) then you need a lot of patience. GM Europe CEO Karl-Friedrich Stracke thinks he might have a plan within two to three months. He might have a plan. Setting the plan in motion may take longer.
Without Opel, GM might not be the world’s largest automaker. But it would be a highly profitable automaker. Opel will cost GM approximately € 1 billion ($1.3 billion) in the coming year and will miss its restructuring plan. Reason for the shortfall: Opel will sell only 1.4 million cars next year, 100,000 less than budgeted. How do we know this? We don’t, but it is in an internal forecast of Opel. The document somehow came into the hands of the German magazine Capital.
Many years ago, an old school Volkswagen exec said to me: “If I want to have visions, I simply drink a few bottles more.”
How things have changed. Nowadays, if you want to be a CEO, you must have a vision. Winterkorn’s vision is world domination by 2018. His colleague Karl-Friedrich Stracke also has a brand new vision. According to Germany’s Focus Magazin, Stracke said at a meeting for the upper management:
Workers, government, the press, all want a clear statement from GM: Is Opel up for sale, or not?
No clear statement is forthcoming, and frustration runs high. There never had been an official denial of the possible spin-off. The stress is so enormous that an alleged telephone call in which GM’s Dan Akerson supposedly told Opel’s Karl-Friedrich Stracke that purportedly GM is not in talks with a buyer for Opel, makes headlines around the world. Is that for real?
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.
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