As General Motors continues its journey of corporate transformation, the head of its European Opel/Vauxhall unit says he is relishing changes to the group’s culture that are simplifying decision-making and devolving more authority to local units.
Opel/Vauxhall CEO Nick Reilly told journalists in Geneva that he sees the division becoming a much more entrepreneurial organisation able to operate more freely with greater control over the development of new products and parts procurement.
GM’s three regions – North America, Europe and the rest of the world – are described by Reilly as operating much more autonomously now.
“That started to happen when I was still running international operations. We were decentralising then. We had a matrix organisation where the pendulum had swung too far; the authority and management was all done by functions rather than locally. That was all changed about six months ago and an entrepreneurial spirit suddenly flourished,” says Reilly.
And now he sees a similar change of culture happening at Opel/Vauxhall.
“We are still getting to that in Europe, but there have been a couple of fundamental changes in the last two months. On the product development side it has been agreed that 100% of the design for anything with an Opel/Vauxhall badge must be done here [in Russelsheim]. Also, we will either develop the whole product here or, if we are using an architecture developed somewhere else, we will have our engineers in that place and bring it back to Russelsheim much sooner than previously planned so that we are responsible for getting our Opel DNA into the car, no excuses.
“We have much more authority on the product side.”
Reilly notes that this still happens within GM’s global product development structure that assigns responsibility for vehicle engineering architectures (GM people quibble with this, but the term is not a million miles away from ‘platform’) to units across the globe. Opel, for example, retains group responsibility for the Delta (Astra) architecture.
But there has been a general decentralisation of decision-making within GM hastened by the events of the past year.
“Decisions are getting made much more locally and much lower down the organisation – in purchasing, for example. There was a lot of centralisation in purchasing and the limit of authority is now much higher.
“Of course we do still buy components on a global basis because that leverages our scale, but if we are buying things that are only used in a local market, that market buys it.”
Reilly cites an example in the area of product engineering where the changed culture inside GM has already made a difference in Europe.
“There is a new vehicle that we decided on that is a new product in a totally new segment for us. We pushed hard for that [approval], made the decision on viability and that was accepted. I would say 6 or 9 months ago, that may well not have been thought to have been a high priority. And secondly, how we get that product is something that is entirely generated by this organisation.”
Reilly says that when he transferred over to Europe, this particular project was waiting for him and he was inclined to put it on a GM global architecture, but the local organisation had different ideas.
“I sat down with the engineers and designers and they convinced me, rightly, that in order to get the dimensions, features and styling on this particular Opel/Vauxhall, we should go with a different starting point. They were right and we took that decision.”
Can Opel/Vauxhall venture into markets in other world regions? Reilly says that is something “that is up to us”. He acknowledged that Opel had tried to export out of Europe before, with only limited success.
“The strong euro hasn’t helped, but I think we have possibly had our positioning wrong,” he said.
“I have just come back from living in China and we sell some Opels over there. It is amazing how much kudos the brand has in China. We have only got a fairly small range in China but I think we could triple our sales in China very quickly by widening the range a little bit.”
Reilly firmly believes that the Opel brand name in China comes with a positive image.
“German engineering is highly regarded in China, the brand is highly regarded and the products are relatively unique, so that can work. On the other hand, if we go and try and compete in the mass market in India, we’d be dead – like we were.”