Posted by: David Welch on November 9, 2009
The drama in Germany between General Motors and Europe just keeps dragging on. Now, its top European executive, Carl-Peter Forster, is leaving the company and GM Vice Chairman Bob Lutz will take over on an interim basis as Chairman of the company’s Supervisory Board. But it’s a non-executive post. Lutz won’t manage day-to-day workings.
This shouldn’t surprise anyone. Forster supported selling Opel to Magna and Russia’s OAO Sberbank, which GM management and the board opposed all along. Given his stance on the sale, it’s surprising that he has lasted this long. Sending Lutz to oversee Europe makes sense, since he spent a lot of time over there early in his tenure as GM’s new-car czar. His job was to get vehicle engineering in Germany mated to GM’s global product development works. He knows Opel’s inner workings.
But it’s obviously not a long-term solution. First of all, Lutz is supposed to be in the U.S. marketing GM’s new cars. Sparking sales in the U.S. remains GM’s biggest challenge. While critics have wondered aloud how a 77-year-old car guy can be a marketing maven, the 60-day money-back guarantee and “May the Best Car Win” campaign have increased brand consideration for GM. Market share has ticked up during the past couple of months. But the job is far from done. Lutz can’t manage Opel’s operations. He is too busy in the U.S.
More to the point, GM needs a German with good labor relations to run Opel. Right now, the German government and IG Metall, the labor union representing Opel’s workers, want nothing to do with GM management in Detroit. They don’t respect GM’s American executives. Lutz is Swiss German, but I scarcely believe they will view him much differently than they view the rest of American management.
GM could go hire a German. They did with Forster. But GM is having a tough time finding talent. Salaries are limited, there is no stock to give just yet, though the company can certainly promise to give share as it nears an IPO. But what’s it worth? And bonuses? Good luck with that. It amounts to a turnaround job with limited financial reward. On top of it, whoever takes that Opel job will have to win over an angry government and hostile union. GM has had trouble landing a new CFO to replace Ray Young in North America. Imagine the challenge of finding the right German executive to lead Opel.