New GM Europe chief's plans for Opel/Vauxhall

Published: 07 December 2009

Following General Motors' back-track on a buy-out from Magna in November 2009, the company's president of international operations Nick Reilly was appointed interim head of GM Europe. Now he's been made the permanent CEO of Vauxhall and Opel, making him the man charged with guiding GM's European division back to profitability.

GM has big plans for Opel and Vauxhall, but has made no secret that there will be widespread pain and change before the good times return. The turnaround plan is nearing completion and it's expected there will be around 8300 redundancies, spread around Europe. Here Reilly talks about his plans in a Q&A session.

Who will be joining you at the helm of GM Europe as it embarks on the turnaround?

'I will be announcing a new management team next week, but I won’t comment on any individuals at the moment.'

Which products will lead the recovery?

'I see gaps which need to be filled. Opel needs a mini; that will be our top priority. I want to clarify that we will also need to continue with light commercial vehicles, that is a reasonable share of our business.'

What role will alternative fuel vehicles play?

'We can take advantage of global technology and look at introducing hybrids. Ampera will be manufactured in Europe. Initially, the car will be imported from the US, but long-term, we are looking for a local source. Ellesmere Port is one of the candidates, but there are others. Also, we will look at battery technology. Electric vehicles will increase the focus on that.'

Last week you attended a meeting with European governments in Brussels. What progress was made?

'It was a positive meeting. We need €3.3 billion in total of which €1 billion is for restructuring. The rest primarily will be for investments in new products. We expect to lose money in 2010, so we will need some support to get through next year. I am not sure when a decision will be made, but I’ve been getting positive responses.'

Can't GM channel some funds from the USA, rather than seeking government bail-outs here?

'There is a belief out there that GM has sufficient money in the US that it can spend in Europe. That is not the case. Much of that money will be needed for Delphi and completing restructuring in the US. We also have some of that money in an escrow account for disasters in the US and we can’t touch that. Third, the US market remains depressed and we have to have some money to get us through 2011. We also need to pay back loans to the US government. Finally the money is US taxpayer money. We can use some of it outside of the US but not all.'

Opel has four manufacturing plants in Germany. Do you expect to safeguard jobs there with the help of the German government?

'We’ve prepared an application for the German government. They were willing to support Magna deal, so we expect some support for our plan. Financial aid is no different from other car companies in the US or Japan or other European countries. I am optimistic they will come forth with aid … but regardless, the German government decision will not lead to more or fewer lay-offs in Germany. The expectation is that we will get financial support from most European governments. We would be disappointed if Germany is the only country which does not participate.'

Will the Opel Astra plant in Antwerp be closed during the restructure?

'Until we finalise our discussions, we won’t make any comments. We will and are looking for alternatives. But bear in mind, we must reduce capacity and we must reduce structural costs. We had plans and an agreement in place, but some plans can’t come true in view of the changing business environment. You see in the US how many plants had to be shut down – and there were probably product plans for each one of them. To be sustainable, we must reduce capacity.'

How soon can we expect the plan for GM Europe to be made public?

'We hope to make an announcement in the next two to three weeks. Anticipate before the end of the year or possibly beginning of next year [2010].'

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