Business - Business Headlines

Tuesday, Nov. 10, 2009

GM appoints international exec to head Opel

Comments (0) |

General Motors Co. said Tuesday that a senior executive who now runs its international divisions will take over responsibility for the European Opel and Vauxhall units while the company searches for a permanent chief executive.

Nick Reilly, GM's Shanghai-based president of international operations, once ran U.K.-based Vauxhall and has extensive knowledge of Opel's operations, company officials said.

News of Reilly's appointment as GM Europe's head came as GM Chief Executive Fritz Henderson wrapped up a second day of talks with officials at Adam Opel GmbH's Ruesselsheim headquarters. He discussed the unit's future, including financing, marketing, product development and production, as well as dealerships and management structures, Opel said in a statement.

GM will search externally for a permanent new CEO of Opel and GM Europe, likely from Germany. No further Opel management changes are expected at this time, Henderson said on Thursday.

GM last week called off the planned sale of a majority of Opel to a consortium of car parts maker Magna International Inc. and Russian lender Sberbank - a solution strongly favored by the government in Berlin.

Speaking to reporters on Tuesday, Henderson expressed understanding for the anger at GM's decision, but praised the German government support as "absolutely crucial," during the past weeks.

The next step at the unit is to produce a complete business plan for Opel in Europe until 2014, with a solid financing concept.

"We have to move quickly to make the business successful," Henderson said, adding that GM would continue working on in November and December.

Reilly, a native of the United Kingdom, ran GM's Asia Pacific operations for three years before being named head of international operations in July. He told reporters that Opel and Vauxhall would have greater authority, though they would also have to be held more accountable.

"We do not want entities doing their own thing," Reilly said.

Neither he nor Henderson spoke specifically about current restructuring plans at the company.

Earlier Tuesday, Chancellor Angela Merkel insisted her first address to parliament since re-election that GM present employees with a concrete plan of what will happen with the company and called for the U.S. automaker to pay back a euro1.5 billion ($2.2 billion) guarantee for a bridge loan granted to Opel earlier in the year.

"We expect General Motors quickly to present a reliable concept that gives Opel Europe and the German sites the chance of a good future," Merkel told lawmakers.

Klaus Franz, Opel's supervisory board president, said Opel had worked with its own advisers on for the last year and a half.

"As we announced last Tuesday, Opel and Vauxhall will remain a fully integrated member of the New GM family, a decision that is in the best interests of Opel and Vauxhall, its customers, employees, other stakeholders and GM," Henderson said in a separate statement from GM. "With his deep experience with the Opel and Vauxhall brands, Nick (Reilly) is well suited to lead this transition and to work toward the earliest possible normalization of the business."

Hans Demant, the GM Europe vice president for engineering and managing director of Opel, will retain his role leading the Opel management board and will work with Reilly in the transition.

GM Europe Chief Financial Officer Enrico Digirolamo also said earlier Tuesday that the company had begun to pay the bridge loan back.

"Today, a euro200 million payback of the Opel bridge loan was made. We now have an outstanding balance of euro600 million. We expect to pay the balance before Nov. 30," Digirolamo said.

GM's board decided a week ago to abandon the sale of 55 percent of Opel to Magna and Sberbank sale - which had appeared nearly a done deal after months of talks.

Germany had promised some euro4 billion in further aid to the Magna plan. Officials haven't yet said clearly whether GM can expect any support; they say it is entitled to make an application, which would then be examined.

GM Europe employs some 50,000 workers, about half of them in Germany.