Shake-Up At GM’s Money Losing European Operations
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RUSSELSHEIM, Germany — (WWJ) The man tasked with turning around GM’s money losing European operations has stepped down. GM Europe President Karl-Friedrick Stracke will be replaced, for now, by GM Vice Chairman Steve Girsky.
“There’s no surprise that General Motors has taken a very hard look at its European operation, and looking at any was possible to restructure them as quickly as possible, given the crisis that’s underway,” said analyst Mike Robinet, managing director with IHS Automotive Consulting.
GM’s European operations lost $256 million in the first quarter. They are also expected to post second quarter losses, as sales have been falling in a continent that analyst say has too much capacity.
European governments, and union contracts make it difficult to close plants. Stracke, who’s 56, had been working to return GM’s Opel and Vauxhaull brands to profitability, at a time when General Motors is trying to transform Chevrolet into a global brand.
“I am leaving my current position knowing that Opel/Vauxhall has a bright future,” Stracke said, in a statement issued by the company. “And I am looking forward to taking on new challenges for GM and (CEO) Dan Akerson.”
Stracke will now work on special assignments, reporting directly to Akerson.
“Karl Stracke worked tirelessly, under great pressure, to stabilize this business and we look forward to building on his success. We appreciate Karl’s many contributions to GM’s success,” read the statement from Akerson.
Akerson had sent Vice Chair Steve Girsky to Europe with the goal of turning around those operations. Girsky says his role as GM Europe President is an interim one, while the company searches for somebody to take on the job permanently.
General Motors is not the only company working to turn around its European operations. Ford is also losing money in Europe, and recently warned that European losses will drag down its second quarter profits.
“The mass market manufacturers in Europe are going to have to make some very quick decisions,” said analyst Mike Robinet. “Decisions that the European market is not used to.”
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