GM faces tough task to find new Opel CEO
Analysts said General Motors Co. would find it difficult to find a new head for its struggling Opel/Vauxhall unit in Europe after CEO Karl-Friedrich Stracke stepped down from the position.
"Who wants to do the job of dealing with the endgame of two decades of GM mismanagement?" Arndt Ellinghorst, a London- based Credit Suisse analyst, said. "This is a very tough and indeed sad undertaking."
Rebecca Lindland, an industry analyst with IHS Automotive, said: "It will be a brave man or woman to take on that challenge."
Industry watchers said GM appeared to be panicking because the change comes so soon after a turnaround plan for 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, Germany, 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."
GM said on Thursday that Stracke, 56, had stepped down to take on special assignments for GM CEO Dan Akerson. German press reports said Stracke may be given a new role with GM in Russia.
GM Vice Chairman Steve Girsky will serve as acting head of Europe while the company searches for a successor to Stracke. Girsky, 50, was named last year to head the Opel supervisory board.
German press reports said Thomas Sedran, an Opel management board member and close aide of Girsky, is favorite to replace Stracke. Sedan is a former global automotive head with turnaround consultants AlixPartners. He was appointed to Opel's board in April to help the automaker's restructuring and has responsibility for operations, business development and corporate strategy at Opel.
Opel's manufacturing chief Peter Thom is also a potential Stracke successor, the Bild newspaper said.
Stracke's departure means that 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 to Canadian supplier Magna International and Russian backers. GM decided Opel was too strategic a part of its global business to sell.
GM's leadership had lost patience with Stracke, head of GM Europe since January 1, because the company needed faster changes as the European market is heading for a fifth straight year of declining sales, two people familiar with the situation told Bloomberg.
German labor officials, who said they had worked well with Stracke, were caught off guard by his departure. "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. Its important that the agreements we reached with the company remain in place."
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.
Two weeks ago, Opel's supervisory board approved a mid-term business plan, which runs through 2016, in a step toward returning to profitability.
Akerson is pushing for GM to fix its European operations. He oversaw the company regaining its title of world's largest automaker last year and posting a record full-year profit of $9.19 billion. "We've lost $14 billion in the last 12 years. It's got to stop," Akerson said of Europe on June 28.
GM had been on track to break even last year in Europe until November, when it rescinded its forecast as its economic outlook there worsened. The euro zone debt crisis has led consumers to pull back on spending.
Opel/Vauxhall's new passenger car registrations fell by 15.4 percent to 377,817 in the EU and EFTA countries in the first five months in a total market down 7.3 percent, according to industry association ACEA.
The timing of the announcement of Stracke's departure after the end of the second quarter and before reporting earnings August 2, "bodes poorly" for GM Europe, said Peter Nesvold, an analyst with Jefferies & Co.
Reuters and Bloomberg contributed to this report