GM Europe head quits following Opel U-turn

7th November 2009, Comments 0 comments

GM has decided to restructure Opel/Vauxhall, with the elimination of at least 10,000 jobs and possibly the closure of German factories, a move that has sparked widespread anger in Germany.

Frankfurt -- General Motors Europe head Carl-Peter Forster is quitting in disgust at GM's decision to hang on to its European unit Opel/Vauxhall, a well-informed source told AFP on Friday.

The source confirmed a report in the Spiegel magazine, saying: "I expect a withdrawal by Forster within a week."

GM executive vice president David Reilly would replace Forster, as GM seeks to soothe anger over its decision to abandon this week a sale of Opel to Canadian group Magna and Russian partner Sberbank, Spiegel said.

"I cannot comment," a spokesman for General Motors Europe and Opel told AFP, adding: "If there are any personnel decisions we will make a statement on it."

Forster was a keen supporter of Magna's bid.

On Thursday, GM chief executive Frederick "Fritz" Hendersen told reporters in Detroit that he would pick a new management team for Opel and its British sister brand Vauxhall within "days or weeks."

GM has decided to restructure Opel/Vauxhall itself, with the elimination of at least 10,000 jobs and possibly the closure of German factories, a move that has sparked widespread anger in Germany.

Germany is home to about 25,000 Opel workers, roughly half of GM Europe's total workforce, and the government had lobbied hard for Magna's bid in hopes of keeping all the German plants running.

Berlin had promised 4.5 billion euros (6.6 billion dollars) in state aid to Magna, angering other European countries where the loss-making Opel has workers because of fears they would bear the brunt of badly needed restructuring.

GM is now expected to seek aid from Germany and other European countries to carry out a three-billion-euro revamp. A German government spokesman said Friday he expected GM to provide details of its plans next week.

German Economy Minister Rainer Bruederle has called GM's behaviour "totally unacceptable" while North Rhine-Westphalia state premier Juergen Ruettgers said the move revealed "the ugly face of turbo-capitalism."

Hendersen acknowledged that "we have some fence-mending and repair that needs to be done."

Spiegel said that Reilly, who is British, brought with him Asian experience with GM's Chevrolet brand, which has increased sales in Europe as Opel has lost market share, calling the mooted nomination "a new provocation for Opel."

Reilly is considered a specialist in restructuring, and could make life difficult for workers at European plants, the magazine added.

Reilly, who has been based in Shanghai, also has experience at British Vauxhall plants in Luton and Ellesmere Port, two sites that welcomed the GM decision cautiously in hopes they might fare better than under Magna's ownership.

Just before GM made its announcement on Tuesday, Forster still appeared to believe the deal with Magna would go through, while saying it might take longer than expected.


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