New GM Europe president and Vauxhall/Opel CEO Nick Reilly has promised investments in new models and pledged an end to business as usual at the unit.
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According to a Reuters report, Reilly wants to encourage entrepreneurial spirit at Opel as quickly as possible by delegating most decisions to country heads and dismantling GM’s bureaucratic style of centralised management that fostered a debilitating culture of passing the buck.
“It might seem obvious, but it isn’t the way GM was managed and there was definitely some confusion about who was accountable,” the 34-year automaker veteran said at the weekend.
“From the top line of revenue to the bottom line of profit, this is now the responsibility of the managing directors of the major entities,” Reilly added.
Local operations will now be free to decide on nearly everything from manufacturing to sales, except for key central responsibilities such as product planning and development which will be run by new Opel executive Frank Weber.
“I would expect to present the (entire) management team probably next week,” Reilly said.
With the new authority comes greater accountability. He said: “If people don’t deliver then we’re going to be pretty fast to move them on.”
The German government had repeatedly frowned on offering assistance unless a new strategic investor took over the reins at Opel and had heavily backed a deal with Canada’s Magna out of fear Detroit could further damage Opel, the news agency noted.
Reilly’s ideas strongly reflect the way Magna is run, Reuters said. It started out as Austrian immigrant Frank Stronach’s one-man company in 1957 only to became the world’s fourth largest autoparts supplier due to a corporate culture that emphasised decentralised structures, sharing best practice, employee participation and risk-taking.
After GM Chairman Ed Whitacre fired CEO Fritz Henderson last week and temporarily assumed his duties, the new top man in Detroit scrapped the four-week search for a new Opel chief and asked Reilly to take up permanent residence in Ruesselsheim, the report said.
When asked about Whitacre’s role, Reilly replied: “He’s very engaged so I would not call him an interim CEO, I would call him a definite CEO … as far as I’m concerned I regard him as there for a long time because that’s the way he’s acting.”
Initially only an interim CEO himself until an outside replacement could be found, Reilly aroused deep suspicions among a hostile workforce when he first arrived in Germany last month, where he was seen as an outsider solely interested in restructuring the company before leaving for Shanghai again, the report added.
The Welshman, who has also headed Vauxhall when once based in the UK, began his new job on Friday by trying to patch up ties with Opel’s 25,000 German workforce, announcing at a massive staff meeting that no single product engineer would lose their job now that Detroit realised how important the development centre in Ruesselsheim was for GM’s future.
New Buick models just launched in China and North America share underpinnings with the Opel/Vauxhall Insignia developed there, for example.
Reuters said Reilly also wants to finish talks with Renault in the next few months over whether to continue jointly building delivery vans at the Vauxhall facility in Luton, north of London, after 2013.
“We need to clarify exactly how we go forward in light commercial vehicles, because we have built up quite a reasonable business there and we have to know exactly how we go forward – whether it’s with partners or whether it’s on our own,” he said.
Reilly believes Opel’s main problem was not churning out the wrong models that don’t sell well but repairing its rusty, beaten-up corporate image.
“It’s more a matter of regaining the trust of potential customers who may have now taken Opel off their list not because there is anything wrong with the product, but just because the company image has been somewhat damaged,” he added.
