GM's New Opel Boss Gets Chance to Shine

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This year, Opel's sales have contracted at almost double the pace of the 5 percent decline in the overall market this year, according to the European Automobile Manufacturers' Association. The carmaker has lost market share to Volkswagen AG, Ford Motor Co. and Fiat SpA even as government incentives in Germany, the U.K., France and Italy boosted demand for its bread-and-butter small cars.

'Refreshingly Pragmatic'

U.K.-born Reilly will have to win backing for a 3.3 billion euro turnaround from countries including Germany, the U.K. and Spain, which house plants making Opel or Vauxhall cars. Detroit- based GM is putting in 600 million euros.

"Reilly seems refreshingly pragmatic," said Hendrik Hering, economy minister of the Germany state of Rhineland- Palatinate, where Opel employs 3,200 staff. "He has gathered experience in turning companies around and what also helps is that he's European."

Reilly was GM's European vice president for sales and marketing, based in Zurich, before moving to Korea. He also ran Vauxhall in the U.K. and worked in the U.S., Mexico and Belgium.

To win support from Opel's 50,000 workers, GM may give staff a stake and agree to profit-sharing, Reilly told reporters on Dec. 4. Reilly took over at Opel from Carl-Peter Forster after GM canceled a sale of the unit to Aurora, Ontario-based parts-maker Magna and Russia's OAO Sberbank.

GM CEO?

"GM realized that things need to be straightened out," said Klaus Franz, a union leader, who met Reilly on his first day at Opel over coffee at the unit's headquarters. "He seems like a person that can stand up for his own opinion, even within GM."

Reilly's move to Opel, after serving as Asia-Pacific chief from 2006, and head of all operations outside of North America from July, has led to speculation he could be a candidate to succeed Fritz Henderson and Whitacre as GM's CEO.

"He'd have to be among the people being looked at," said George Peterson, president of AutoPacific Inc., an industry consultant in Tustin, California. "He was groomed for the position with the role he had in Asia."

Still, Peterson said a "dark horse candidate" seemed likely. Several GM directors favor appointing an outsider, according to a person familiar with the situation.

Mountain Hike

In Korea, Reilly built relations with workers through moves including hiking up Mount Bongcheon, west of Seoul, with a union leader to perform good luck rituals, according to his Korean- language memoirs, "CEO Nick Reilly, Passion" (Hans Media, 2007). The University of Cambridge graduate also often sang in karaoke bars with colleagues and reporters.

"He certainly differentiated himself from former Korean managers and actively communicated with workers," said Kim Yun Bog, a spokesman for GM Daewoo's labor union.

Reilly helped revived sales at Daewoo by introducing new or revamped models, such as the Tosca sedan and Matiz compact, and the unit became GM's global hub for developing small vehicles and minicars.

"Reilly's proven himself after successfully reconstructing Daewoo," said Lee Jin Sik, a Seoul-based analyst at CSM Worldwide Inc. "He may be the perfect troubleshooter to deal with the chaotic situation at Opel."

To contact the reporters on this story: Seonjin Cha in Seoul at scha2@bloomberg.net; Chris Reiter in Berlin at creiter2@bloomberg.net

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