Opel names Neumann as new CEO

Neumann faces tough challenges at Opel.

MUNICH -- General Motors' Opel division today named Karl-Thomas Neumann as its new CEO. Neumann, 51, a former head of Volkswagen China and the supplier Continental, will take up the post on March 1, Opel said.

Neumann will also take the position of GM Europe president and become a member of GM's executive committee.

GM Chairman Dan Akerson said in a statement: "This move will ensure that we have the best possible leadership in place as we continue driving toward profitability and growth in Europe."

GM Vice Chairman Steve Girsky, who is also chairman of the Opel's supervisory board, said Neumann's track record in growing businesses in a profitable way will help lead the company on a "turnaround path that will be counted among Europe's most successful."

Neumann faces huge challenges in halting Opel's sliding European vehicle sales, which fell by 16 percent in 2012, double that of the industrywide decline, and returning the unit to breakeven by 2015, a move many observers say is too ambitious.

GM's European operations have lost $17.3 billion since 1999. The company has forecast last year's deficit at as much as $1.8 billion, eating into profits led by a rebound in the United States and contributions from Asia.

"We think the probability of a doubling of GM Europe losses to $3 billion is just as likely as a break-even," Morgan Stanley wrote earlier this week.

Neumann will also spearhead efforts to reduce fixed costs by winning concessions out of unions and closing a factory in Bochum, Germany. He said in a statement: "I'm aware that this will be a challenging job, but I'm convinced that together with my leadership team and employees, we will turn around the company."

In addition to cutting costs, Opel plans to introduce 23 new vehicles by 2016, including the South Korea-built Mokka compact SUV, which went on sale in October, and the Cascada convertible, which will hit showrooms in April. The new Adam minicar, which is produced in Eisenach, Germany, went on sale this month and has received more than 20,000 orders.

A German-born electronics engineer, Neumann was head of VW's China operations until last June when he was replaced by VW veteran Jochem Heizmann and not given a new role in the automaker. He was also CEO of German supplier Continental but quit in 2009 following a power struggle with Continental's controlling shareholder, Schaeffler Group.

Neumann will take over at Opel from Thomas Sedran, the unit's strategy chief, who served as interim CEO following Karl-Friedrich Stracke's departure after about 15 months running the brand. Stracke himself was the replacement for Nick Reilly, who was appointed to the job after Detroit-based GM called off the planned sale of Opel in November 2009

Bloomberg contributed to this report