Another Opel CEO steps down
MUNICH/DETROIT (Reuters) - General Motors Co (GM.N) pushed aside another chief executive at Opel in a surprise move analysts said shows the U.S. automaker's growing impatience with 12 years of losses in Europe.
GM said Opel CEO Karl-Friedrich Stracke had stepped down to take on "special assignments" for GM CEO Dan Akerson. GM Vice Chairman Steve Girsky, who heads Opel's board, will serve as acting head of Europe while GM searches for a successor to Stracke.
Analysts said GM appeared to be panicking as the change comes so soon after a turnaround plan for the struggling Opel was approved and a replacement was not named.
"I spoke to Stracke recently and it looked as if he very much wanted to carry out his duties," said Stefan Bratzel, a professor at the University of Applied Sciences in Bergisch Gladbach specializing in the auto industry.
"GM must not have been satisfied with the business plan," he added. "I thought things had gotten better between Detroit and Opel over the past couple of months, but sending this kind of message is catastrophic."
Two weeks ago, the supervisory board for Opel approved a mid-term business plan, which runs through 2016, in a step toward returning to profitability. But real savings in a restructuring will not come until GM negotiates a deal with labor unions to close the Bochum, Germany plant after 2016.
"We've lost $14 billion in the last 12 years. It's got to stop," Akerson said of Europe on June 28. "We're looking at some sort of agreement with our unions that would allow us to consolidate." In March, he said it would be another year or two before GM was profitable in Europe again.
Analysts said the move showed the U.S. automaker's growing intolerance for the losses in Europe.
"This is a clear sign that GM was getting impatient and that Girsky believes he can do a better job," IHS Automotive analyst Christoph Stuermer said.
The change also means Opel will see its fourth CEO in less than three years. Hans Demant was pushed aside in November 2009 and was replaced two months later by Nick Reilly, who lasted until April 2011. Demant was more of a symbolic head who reported to European chief Carl-Peter Forster, who left in 2009 after GM killed a deal to sell Opel.
"The timing of today's announcement bodes poorly for the condition of GM's European business," Jefferies analyst Peter Nesvold said in a research note.
Nesvold, who has a "hold" rating on GM shares, suggested vehicle pricing in Europe is weakening and reiterated he expects GM Europe to report a second-quarter loss of $432 million.
German labor officials, who said they had worked well with Stracke, were caught off guard by the news.
"It's regrettable" said Armin Schild, Opel board member and regional head of IG Metall Mitte. "GM is now responsible for finding someone with a forward thinking corporate strategy. It's important that the agreements we reached with the company remain in place."
Another Opel board member initially did not believe the news of Stracke's exit, while a person close to labor representatives on the board said they were caught "completely by surprise." Both asked not to be identified in discussing the management change.
The head of the German state government in Hesse, home to the headquarters of Opel, voiced fears GM would renege on labor guarantees in light of Stracke's exit.
Opel has been in talks with its German unions over extending a deal that protects all four factories in the country from closure through the end of 2014 by an additional two years in exchange for wage concessions and an agreement to close the Bochum plant in 2017. Hesse state premier Volker Bouffier called on GM to honor its commitments.
In 2009, GM decided Opel was too strategic a part of its global business to sell. However, the eurozone debt crisis led consumers in the region to pull back on spending, causing GM last year to abandon its target for break-even results in Europe for the full year.
The weak demand in Europe has hurt others as well. Earlier on Thursday, GM's ailing alliance partner Peugeot (PEUP.PA) said it would cut 8,000 jobs and close the Aulnay plant in 2014.
Also, last month, Ford Motor Co (F.N) cited weakness in Europe when it said its second-quarter losses from operations outside North America could be triple the $190 million those regions collectively lost the prior three months.
Last year, GM retained turnaround consultants AlixPartners to help in Opel's restructuring, and in February Opel named Thomas Sedran, one of the firm's European auto practice heads, to its board with responsibility for operations, business development and corporate strategy. A labor source told Reuters that Sedran, who has worked closely with Opel since 2009, looked as if he was being groomed to lead Opel.
Stracke was due to address an industry conference in Munich on Thursday; development chief Rita Forst came instead.
(Reporting By Christiaan Hetzner in Munich and Ben Klayman in Detroit; editing by John Wallace, Bernard Orr)
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