Former Wall Street analyst Steve Girsky will now be leading GM's struggling Opel subsidiary.
General Motors Vice Chairman Stephen Girsky, the company’s chief troubleshooter, has been named Chairman of the Supervisory Board of Adam Opel AG, effective immediately. Girsky replaces Nick Reilly, who recently resigned from the board as a member and chairman and will retire from GM next March.
The shake-up follows word that Opel once again went into the red for the third quarter after two black quarters. The German-based subsidiary has been struggling for years and GM nearly sold off a majority stake in Opel following the humbled U.S. giant’s emergence from bankruptcy in 2009.
“With Steve Girsky as Chairman of the Board and Karl Friedrich Stracke as (the new) President of GM Europe and CEO of Opel/Vauxhall, GM has two highly experienced leaders to take Opel to the next level,” said GM Chairman and CEO Dan Akerson. “They will build on the hard work that’s been done under Nick Reilly’s leadership to return our European operations to sustainable profitability.”
Girsky steps into the role just as the European auto industry is grappling with the prospects of another recession. Only last week, Akerson warned Europe’s financial woes could lead to another economic downturn that could ripple across the globe. However, even before the financial crisis gripped Europe, Opel and GM Europe — of which it is the principle component — had failed to meet its turnaround target and Akerson had vowed to make fixing the European operation one of his key priorities.
One potent symbol of Opel’s decline has been the closing of its dealership in the center of the German capital of Berlin, which has now been left vacant for several months, while around the corner dealerships operated by Volkswagen and Mercedes-Benz are open for business.
Opel is also something of the odd man out in the German auto industry; while other German carmakers enjoy a level of express or tacit support from the German federal government Opel has had to piece together support from individual German states as it has restructured over the past three years. But those state governments have been reluctant to approve the job cuts and plant closings Opel has demanded. Meanwhile, GM’s own ability to offer support for Opel limited by the politics of the U.S. bailout that helped it emerge from bankruptcy.
In 2009, GM came close to selling a majority stake in Opel to a Russo-Canadian consortium led by Toronto-based mega-supplier Magna International.
Nonetheless, Girsky said he is determined to put Opel back on track. After breaking even during the first quarter of this year and posting a profit the following quarter, outgoing Chairman Reilly had set a goal of pushing the struggling subsidiary solidly back into the black for all of 2012.
“GM is committed to Opel and wants the brand to grow in a profitable way. To realize Opel’s full potential, we will continue to optimize its cost structure, improve margins and better leverage GM’s scale,” said Girsky, who has served as a member of the Opel Supervisory Board since January 2010.
In addition, GM also announced GM Chief Financial Officer Dan Ammann and GM International Operations President Tim Lee have been named to seats on the Opel Supervisory Board.