General Motors Co.’s Vice Chairman Steve Girsky has acknowledged that the company’s strategy failed to turn around Opel (its carmaking unit in Europe), according to a report by Financial Times Deutschland. Girsky told the publication that its plan for Opel to be profitable this year “did not work.”
He also said that Opel chief Karl-Friedrich Stracke would be developing a new plan with Opel’s management. Last November, GM dropped its target for a break-even in 2011 after it posted a loss of $300 million in the third quarter for its operations in Europe.
For more than 10 years now, GM hasn’t generated an annual profit in Europe. In fact, its European operations reported a $1.6 billion loss last year. Girsky, formerly a New York investment banker, became responsible for turning around Opel after being appointed as the chairman of Opel's supervisory board at the end of November.
Girsky, the replacement of Nick Reilly, was appointed at the same time as GM International Operations President Tim Lee and Chief Financial Officer Dan Ammann to Opel's supervisory board.
GM has been working to hasten the restructuring of this brand. According further to the report from the FT Deutschland, Girsky said that Opel should emulate the accomplishment of Volkswagen, which has excellent profit margins due to its high pricing structure, effective cost management and achievements in various markets.
When asked about GM’s decision to use the Chevrolet brand so that its European sales will improve, Girsky said that he sees no conflict with Opel.