GM to Centralize Control of European Operations

16 June 2004

"We want a culture shift," demanded a senior honcho at General Motors after the US auto giant's European unit lost a cool $116 million (€96.08m; £63.92m) in this year's first quarter -- almost double the deficit for Q1 in 2003.

And lo a culture shift came to pass at GM Europe. Fast!

Two of the carmaker's three European units -- Germany's Opel and Sweden's Saab -- having refused to toe the Detroit line, experienced a sudden dearth of directors.

The Opel management board was decimated overnight by the departure of the board trio respectively responsible for marketing, communications and manufacturing.

A fourth director, ceo Carl-Peter Forster, has been shunted upward to become chief operating office of GM Europe, reporting to new European chairman Fritz Henderson; while the Opel driving seat is taken by Hans Demant, former GM Europe head of manufacturing.

Meantime, Saab management, which until recently persisted in developing vehicles and manufacturing processes outside GM's global systems, has also been brought to heel.

But, no jobs are expected to go as a result of the losses or GM's tightening of the reins. Although it may be that closer integration will eventually lead to the excision of overlapping jobs.

GM's third European business, Vauxhall of the UK, is not directly affected by any of the changes. Nor is it known how and to what extent the sea-changes taking place will impact on marketing activity.

Data sourced from: Financial Times; additional content by WARC staff