In: former auto analyst Steve Girsky.
Once again, the music has stopped in the game of musical chairs at General Motors troubled European operations and this time it’s Karl-Friedrich Stracke, GME President and CEO of Opel/Vauxhall who was left without a seat.
The long-time German engineer, who took the European post only last November, is the latest victim in a worsening crisis that will now test GM Vice Chairman Steve Girsky. A long-time Wall Street auto analyst-cum-automotive-executive, Girsky has been chairing the Opel Supervisory Board and will now take over as GM Europe’s interim chief while the search begins for a new boss.
“Karl Stracke worked tirelessly, under great pressure, to stabilize this business and we look forward to building on his success. We appreciate Karl’s many contributions to GM’s success,” Akerson said.
Out: Karl-Friedrich Stracke, after less than a year in charge of GM Europe.
The 56-year-old Stracke had served as GME’s chief engineer until being tapped to run the company last autumn. He replaced former Europe boss Nick Reilly, a 37-year GM veteran who specialized in turning around the maker’s more troubled operations. But he – and, subsequently, Stracke – failed to find the formula to reverse Opel’s seemingly endless downward spiral.
The maker had hoped to end a steady string of losses in 2011 but instead went another $700 million into the red. The maker has since warned that 2012 could bring another $1 billion in losses – with no immediate end in sight.
Part of the problem is endemic to the European auto industry. Sales on the Continent have tumbled sharply as the debt crisis that crippled Greece has spread to Spain, Italy, Ireland and other weak regional economies.
But Opel faces a variety of unique issues including a poor brand image that has particularly hurt the marque in its home German market. GM Europe is struggling with a significant amount of excess capacity complicated by unsustainably high labor costs, analysts add.
The maker has been negotiating a series of steps to trim capacity and reduce costs – but implementing those actions will take at least two to three years due to strict European rules regarding plant closings and job cuts. Complicating matters, the maker has been described as something of an “orphan” in that it has minimal political support that might otherwise be used as capital to gain some government assistance.
By contrast, its new French alliance partner, PSA Peugeot Citroen, is expected to seek a bailout from the French government in the near future.
That alliance is still a matter of intense debate. The two partners have each targeted a billion dollars in savings annually once it gets rolling – but industry observers are far less confident of a payoff.
Nonetheless, Stracke, who helped negotiate the deal and who will now go on “special assignments” for GM Chairman Akerson, insisted the company has hit bottom.
“I am leaving my current position knowing that Opel/Vauxhall has a bright future,” Stracke said. “And I am looking forward to taking on new challenges for GM and Dan Akerson.”
GM has set no public deadline for finding a full-time replacement for Stracke.