European finance crisis forces GM to accelerate Opel’s restructuring plan

Article by Christian A., on January 28, 2012

The European financial crisis is providing new urgency for General Motors Co. to convert its Opel unit into a profitable one. GM has already slashed its European workforce by 5,800. Now, it is studying a range of additional strategies to stem the losses such as searching for greater cost-savings between Chevrolet and Opel operations in Europe, disclosed Tim Lee, president of GM's international operations. Moreover, the U.S. automaker has created various changes to its high-level personnel while it attempts to turn around the money-burning European brand.

Among these personnel changes include the appointment of Lee to head the Chevy in Europe, Dan Amman as GM chief financial officer and Vice Chairman Steve Girsky to the supervisory board of Opel. Girsky was named chairman of the board. On Thursday, Mary Barra, the GM senior vice president for worldwide product planning, joined the supervisory board.

Johan Willems, a longtime GM spokesperson, also joined the management board of Opel as chief of communications.

Additionally, GM could transfer some production to Europe from Korea in order to increase revenue as well as utilize assets there, three insiders have revealed. Furthermore, Frankfurt-based fund manager Stefan Bauknecht for Deutsche Bank AG investment vehicle DWS commented that this is the time for GM to make aggressive efforts with unions in order to reduce costs.

He added that the negative swing in the automotive market in Europe intensifies the pressure for both the trade unions and the management to find a compromise. Dan Akerson, GM Chief Executive Officer, has lost over $2.34 billion on the automaker's European operations since pushing to cancel the sale of the Opel brand in late 2009. Moreover, he has lost as much as $13 billion by the European unit since 1999. [source: Autonews]

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