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GM continues to shake up leadership of money-losing European unit

Posted by on 23/03/2019

DETROIT – A leadership shake-up at General Motors Co.’s money-losing European unit continued Monday as the company named Vice Chairman Stephen Girsky as head of the board that oversees the bulk of GM’s operations on the continent.

Girsky replaces Nick Reilly, who resigned from the Opel supervisory board and announced his retirement as president of GM Europe earlier this month.

GM also appointed Chief Financial Officer Dan Ammann and International Operations President Tim Lee to the 20-member Opel board, which governs Adam Opel AG, made up of GM’s Opel brand and its British Vauxhall brand. Lee will take the post created with Girsky’s promotion to chairman, while Ammann will take a seat vacated by Opel sales and marketing Chief Financial Officer Keith Ward.

In 2009, Girsky led a successful effort to shoot down plans to sell GM’s European operations to a group of investors led by Canadian auto parts maker Magna International Inc. Girsky, a former financial analyst, has served on the Opel board since January of 2010. He has represented the United Auto Workers union’s retiree health care trust fund on the GM board since July of 2009, when the company emerged from bankruptcy protection.

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“GM is committed to Opel and wants the brand to grow in a profitable way,” Girsky said in a statement. “To realize Opel’s full potential, we will continue to optimize its cost structure, improve margins and better leverage GM’s scale.”

GM announced earlier this month that Reilly would retire as head of GM Europe in March of next year. Opel-Vauxhall CEO Karl Stracke, a former chief of engineering at GM, will replace him starting Jan. 1.

GM’s European unit swung to a pretax loss of $292 million in the third quarter. The loss forced GM to back off of a forecast of breaking even in Europe this year.

Europe faces a financial crisis and could slip into recession. Growth is slow is several key nations. Italy, the region’s third-biggest economy, is bucking under the weight of government debt, and the region is dealing with high unemployment, stingy bank lending and declining exports.

GM CEO Dan Akerson said earlier this month when the company announced its third-quarter results that the European performance is unacceptable and said GM must look for more ways to control costs. But he stopped short of giving specifics or talking about plant closures or layoffs.

Last week, Akerson also wouldn’t give specifics, but he made reference to French competitor Peugeot Citroen SA’s plan cut 6,000 jobs because of flat demand in Europe.

Sales in Europe are about 18 per cent of GM’s 2.2 million global total, but they are expected to weaken as the economy slows in the fourth quarter.

GM shares fell 53 cents, or 2.4 per cent, to $21.15 as the broader market dropped in afternoon trading.

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