July 12, 2012 4:56 pm

GM’s European head to step down

GM car factory production line Brazil

General Motors said on Thursday that Karl-Friedrich Stracke was leaving as head of its lossmaking European division and Opel and Vauxhall brands after barely a year on the job.

The carmaker said that the 56-year-old German was stepping down as GM Europe’s president and Opel’s chief executive “to take on special assignments”, reporting to Dan Akerson, GM’s chief executive.

Steve Girsky, Opel’s chairman, will serve as the division’s acting president while the company looks for a replacement, it said.

Mr Stracke’s abrupt departure will raise further questions over the future of GM’s troubled European brand, which is in the midst of its second restructuring plan in two years.

His departure also comes at a critical moment. The Detroit carmaker last month approved a five-year business plan aimed at restoring its European operation – primarily Opel – to profitability by 2016.

The brand, headquartered in Rüsselsheim near Frankfurt, is struggling to stay afloat amid a deep trough in European car sales and brutal competition led by Germany’s Volkswagen. Opel’s sales fell 11 per cent in January to May on a European market that was down 8 per cent.

GM said on Thursday that Mr Stracke “led the effort to put Opel/Vauxhall on a path towards sustained profitability in the midst of a massive European economic downturn”.

Mr Akerson said: “Karl Stracke worked tirelessly, under great pressure, to stabilise this business and we look forward to building on his success”.

Mr Stracke became CEO of Opel in April last year and president of GM’s European business – which also handles sales of its smaller Chevrolet brand – at the end of 2011.

Mr Stracke was Opel’s public face in Germany as the company held delicate talks with its workers on cutting costs and improving Opel’s brand image and profit margins in a difficult market.

However, the American Mr Girsky, who is also GM’s deputy chairman, was seen as the prime offstage driver of GM’s efforts to restore profitability in Europe, the main drag on the US carmaker’s earnings right now.

The departure took many inside GM Europe by surprise. However, rumours had circulated of friction between Mr Stracke and GM’s US management over the pace of change at Opel.

“I don’t think the changes in Europe have been happening fast enough,” said one company employee. “There is some frustration with the Americans that we haven’t moved forward as fast as we should have with cost-saving activity and structural change in the business.”

Trade unions were at times angered by Mr Stracke’s leadership style and his alleged refusal to disclose essential information on the restructuring.

The German manager was booed when he presented elements of his restructuring plan to workers at Opel’s headquarters in May. Workers at Opel’s Bochum plant, which GM plans to close after 2016, walked out of a shop floor meeting when Mr Stracke declined to guarantee the plant’s future.

Sensitive talks between management and worker representatives on the future Bochum plant and possible wage concessions are set to continue until October.

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