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GM Europe Head Resigns Over Opel Sale Decision

Carl-Peter Forster, GM group vp and president of Opel leaves.

by on Nov.06, 2009

 Aufedersein Carl Peter.

Auf wiedersehen Carl-Peter Forster as the Opel/Vauxhaul survival saga continues.

Carl-Peter Forster will be leaving his role as head of European operations and “will advise” the company during the transition to find a new CEO, it was announced by GM today.

Insiders say Forster was taken by surprise by the sudden reversal on Monday by the GM Board of Directors to reject a sale of Opel/Vauxhall to Canadian auto supplier Magna and Sberbank, a large Russian financial institution.

Forster had been a vocal supporter of the sale, as had been German Chancellor Angela Merkel and the German Metal Workers union. The Magna sale was thought to protect more jobs and plants in Germany, while imposing greater burdens on Opel/Vauxhall operations elsewhere in Europe, than a competing bid from a Belgium based investment group.

It was not immediately clear if  Forster was pushed out or he left in a dispute over how many jobs and plants would be closed in an impending revised Opel reorganization, which will be undertaken by GM alone, if government and labor union approvals are forthcoming. Perhaps, Forster pushed the Board too hard to accept a German favored solution.

GM claimed that no other management changes to the Opel Europe organization are being considered at this time, and that all key management roles remain while the search for a CEO for  Opel Europe commences.

GM insiders say it needs to cut at least 30% in structural costs, eliminate 10,000 jobs and close one or more plants for Opel to be viable. The cost of the restructuring is estimated at €3 billion, or $4.5 billion.

Forster will be replaced temporarily by Nick Reilly, the British head of GM’s international operations.

GM said it will initiate an immediate external search for a new CEO for Opel and will work with Opel leadership, along with representatives of the European Employees Forum, in “moving forward with a plan that will build a strong and enduring future” for the Opel/Vauxhall brands.

“The Opel brand has made tremendous progress under Carl-Peter’s tenure and leadership over the past several years,” said GM President and CEO Fritz Henderson, whose own status with the new GM board of directors, comprised largely of non-automotive executives, is unknown.

Steven Rattner, a key member of the U.S. Treasury’s Auto Task Force, said in a speech last month that he was shocked by how weak GM finance staff was and how inadequate the GM reorganization plan was when it was submitted to Treasury. Henderson was in charge of developing the plan and is a product of that same finance staff. The plan was rejected, and the Obama Administration forced the  failed company into bankruptcy.

Henderson was polite about Forster’s unexpected and unexplained exit.

“We thank him for his significant accomplishments and wish him only the best in the future.  In the meantime, we’re confident that the key personnel leading Opel will stay focused on running the business during this time of transition,” Henderson  said.

Henderson also said in a statement, “We expect to finalize our proposals for establishing Opel/Vauxhall’s future next week and will be engaging all stakeholders to see how we can best work together in achieving our mutual goals.  We will update on our progress as soon as is possible.”

“The past few years building the Opel brand has been a tremendous personal opportunity,” said Forster.  “We’ve seen great strides in design, quality and technology and the launch of truly world-class products.  It’s been an honor to be part of the history of Opel, and I wish all the people with the organization only the best in what I’m certain will be a great future.”

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5 Responses to “GM Europe Head Resigns Over Opel Sale Decision”

  1. Jeffrey carroll says:

    Well, I am really surprised that you say Carl Forster was surprised at GM withdrawing and deciding to keep Opel Vauxhall. As head of operations Europe I would have thought he, as he is being paid so well, didn’t foresee this, I think again this shows that a lot of the GM staff who feel they are so high and mighty are no longer in touch with the company and its staff and just look after themselves. They are so complacent, they should go. They should never lose touch with the ground staff, who make the company. It seems they just feather their nest and take what they feel is the right step for them, not the company. I have said all along that GM would be foolish to take on Magna as shareholders; maybe I should be doing the job.

  2. Ken Zino says:

    Well, Jeffrey, a hastily instituted search is underway for a new leader (grin)…

  3. jeffreycarroll says:

    Excellent, I am sure the right man /woman will be found and will have to work hard to fill the shoes of the predecessor.
    But to ensure we return to profit, we need to start eliminating the non-profit factories.

  4. Ken Zino says:

    DETROIT, 10 November 2009 – Nick Reilly, GM executive vice president and president, GM International Operations, will immediately assume responsibility for the operations of Opel/Vauxhall Europe while an external search for a new CEO commences, it was confirmed today.

    Reilly, with extensive prior experience in Europe with the Opel and Vauxhall brands, will support the European leadership team in running the business and will oversee the creation of a strategy to position Opel/Vauxhall for long-term success.

    Reilly maintains overall direction of GM’s International Operations based in Shanghai, China, but day-to-day operations of the various international subsidiaries in his organization will be handled by the respective country managing directors while he serves in Europe.

    “As we announced last Tuesday, Opel/Vauxhall will remain a fully integrated member of the New GM family, a decision that is in the best interests of Opel/Vauxhall, its customers, employees, other stakeholders and GM,” said Fritz Henderson, GM president and CEO. “With his deep experience with the Opel and Vauxhall brands, Nick is well suited to lead this transition and to work toward the earliest possible normalization of the business.”

    Hans Demant, GM Europe vice president Engineering, managing director Adam Opel GmbH, retains his role leading the Opel Management Board and will work with Reilly in the transition.

  5. jeffreycarroll says:

    Nick is an excellent man to oversee the position that has been vacated. I am sure he will have the future interests of Vauxhall/Opel at hand. Thanks for your replies Ken.