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GM Europe Coming Under Tough New Scrutiny

Balance sheet bleeding again.

by on Nov.09, 2011

Opel's declining market share is weighing down the General Motors balance sheet.

General Motors faltering European operations are coming in for additional scrutiny from GM’s top management after posting a loss for the third quarter – and putting an end to hopes of finally staunching the flow of red ink at the troubled subsidiary.

GM Europe finished the quarter reporting an EBIT-adjusted loss of $300 million. Overall, GM earned $1.7 billion in the third quarter, compared to $2 billion during the same period in 2010, the 15% decline largely the result of problems in Europe and Latin America.  (Click Here for more on GM’s second quarter results.)

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GM Chief Financial Officer Dan Ammann lamented that, “We have to do a better job in Europe and South America. The results there are just not sustainable.”

GME had shown some positive signs by breaking even during the first quarter of 2011 and turning in a modest profit three months later, but the latest figures raise questions about forecasts that the European subsidiary will be able to push back into the black for all of 2012.


Management Shake-Up Coming to GM Europe

With maker clawing back, chief engineer Stracke taking over.

by on Nov.08, 2011

GM Europe Chief Engineer Karl-Friedrich Stracke will take over the long-troubled subsidiary in January.

General Motors will shake up its top European management as the long-troubled subsidiary finally claws its way back into the black.

In a significant move underscoring the role of product in the long-awaited turnaround, GM has named former chief engineer Karl-Friedrich Stracke to become president of GM Europe, succeeding Nick Reilly, who will be retiring.

If anything, the 61-year-old Brit will be sent off with honors after 37 years with GM.  Reilly has served as something of a turnaround specialist at GM during the course of his long career, and has been credited with significant improvements in operations including not just Europe but the former GMDAT, the Korean subsidiary recently renamed Chevrolet.

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“Nick Reilly has answered the call for GM at every turn,” said GM Chairman and CEO Dan Akerson.  “He returned to Europe and successfully led the turnaround of our operations there during one of the most tumultuous times in our company’s history.”


GM Going it Alone With Opel

Maker withdraws aid requests, will self-fund turnaround.

by on Jun.16, 2010

Opel CEO Nick Reilly will have to lead a turnaround without government aid.

After having the Berlin government reject a bailout request for its troubled Opel subsidiary, General Motors is withdrawing a bid for help from other European governments and will now seek to fund the operation’s recovery on its own.

The announcement is the latest twist in a saga that began even before GM’s own U.S. bankruptcy, last year, which triggered a $50 billion package of aid from the American Treasury.  At one point, while the giant automaker was struggling for survival, it gave serious thought to selling a majority stake in German-based Opel and its British sibling Vauxhall.

But in recent months, with its own recovery proceeding better than anticipated, GM has not only been able to hang onto Opel, but now believes it can handle the financing of the unit’s turnaround.

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“Given the need to proceed quickly,” a GM statement said, it can no longer wait while trying to negotiate assistance from various European governments.  That bid was dealt a severe blow, last week, when the administration of German Chancellor Angela Merkel rejected the latest request for Opel aid.


Nick Reilly to Run Opel – Temporarily

GM's Asian/International boss filling in as Euro CEO sought.

by on Nov.10, 2009

British-born Nick Reilly will temporarily fill in as Opel CEO while GM looks for a permanent replacement for former boss Carl-Peter Forster.

British-born Reilly will temporarily fill in as Opel CEO while GM looks for a permanent replacement for former boss Carl-Peter Forster.

Globe-trotting British auto executive Nick Reilly, who has been running General Motors’ big Asian operations, is relocating halfway around the world – for now, anyway, as the temporary CEO of the maker’s troubled Opel unit.

The German-based Opel is in the midst of turmoil surrounding GM’s decision to back out of its planned sale to a Canadian-Russian consortium led by the giant auto supplier Magna International.  The proposed deal, which had been forcefully backed by the German government, would have left GM a minority player, and was seen as a challenge to using Opel as a global product development center.

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Last week, Opel’s CEO Carl-Peter Forster announced his resignation.  He is expected to go to work for Jaguar-Land Rover, the British luxury marques now owned by India’s Tata Motors.  That put GM into a scramble to find a new Opel boss who could manage the reverberations of the failed sale.  German political leaders have raged about GM’s decision and German workers – who expected to get a 10% stake in the company after the sale – initially staged a walkout and withdrew an offer to grant Opel concessions.