I reckon we might be very surprised at the speed and depth at which General Motors gets going on the restructuring of Vauxhall/Opel after yesterday’s welcome decision to hold on to its European business.From what I’m hearing, the project will be handed over to GM in the US and be overseen by CEO Fritz Henderson.
One of Henderson’s priorities is to find a new faces to replace Carl-Peter Forster and other directors at GME. It’s reckoned that the sell-off process exposed the GME board and the Henderson strategy is likely to include a major cull of suits similar to the one that cleared out the Detroit boardroom.
A possible successor is Eric Stevens, GM’s manufacturing boss, although there is a remote possibility that an outsider might get the job.
This will mark a significant shift of power to the US and one that some insiders reckons will also tilt the balance in favour of Vauxhall and the UK inside GME rather than Opel and Germany.
For all its posturing, Opel has been a worse performer in terms of sales than Vauxhall, a balance not reflected in the allocation of boardroom power and resources.
The workforce are going to share plenty of pain, too — with Germany tipped to feel the full force.
GM’s plants in Bochum and Eisenach are said to be running at 50 per cent capacity utilisation, and are both earmarked for closure alongside Antwerp in Belgium. Although some staff could be transferred to a beefed-up Russelsheim factory in Germany, there will also likely be a big shake-up of HQ jobs in Germany.
GM is said to be bracing itself for a backlash from the work’s council, but the feeling is that the balance of power lies with GM, now that Angela Merkel has been re-elected German premiere.
It’ll be fascinating to see how this piece of power politics plays out, because Henderson and Merkel spoke just hours before the Magna deal was done on the eve of the German elections.
That surprised many inside GME who were preparing to announce RHJ International as the successful bidder. That’s why the press conference to announce the buyout was inexplicably delayed an hour – to cope with the late change.
Once Henderson has got GME restructured by the end of next year, he’s tipped for retirement, and control of the new company likely to be handed over to GM International Operations.
That will put Vauxhall/Opel under the umbrella of Nick Reilly, one of the most senior Brits in the car industry and now running all of GM business outside Europe and NA.
Reilly is great guy and can be relied upon to nurture GME in future. Things are looking up.
GM are also betting that the £2.1 billion needed to re-capitalise GME will still come flowing in from the British, Spanish, Polish and German governments.
Thanks to improving finances of GME, that sum has come down from the £3.2bn originally quoted.
Increased confidence in GM’s ability to recover also means that the US government has cleared £1.5bn from its TARP rescue fund to go overseas and pay off a bridging loan from the German government, possibly as soon as the end of November.
Finally, it looks like Ellesmere Port is poised to move to three-shift operation. It’s unlikely to mean more jobs, but a clever internal re-organisation to get more output from the same headcount.
That only makes sense if another product is added in. Could that be the range-extender hybrid Vauxhall and Opel Ampera?
While the sell-off saga has been in full swing that project has been on ice. What a fitting reward for all the hard work of the patient workforce at Luton and Ellesmere Port.