General Motors vice Chairman Steve Girsky, in an interview with Financial Times Deutschland said its strategy for turning back to profit its European carmaking division Opel, was a failure.
“Unfortunately, our plan for making Opel profitable this year did not work,” it cited Girsky as saying in New York.
With Opel in continental Europe and Vauxhall in England, G.M. made many billions of profits over the years. During the 80’s and 90’s, European profits helped keep the home company flush.
But after that, the automaker became the stage for a parade of managers. Quality plummeted, styling stagnated and sales fell.
GM Europe, which includes Opel, Vauxhall and Chevrolet, lost $292 million in the third quarter, an improvement on the loss of $559 million a year earlier, but then dropped its earlier target of breaking even in 2011.
Last month, the company named Vice Chairman Stephen Girsky to chair the board that supervises its European Opel brand.
If Girsky and the high-powered team he leads can’t return Opel to health and profitability, it probably can’t be done.
Returning Opel to profitability won’t be easy, but Girsky’s greatest challenges may be repairing the relationship between Opel and the rest of GM, and restoring the brand’s good name in Germany.
However, the situation in the global economies is not stable. Analysts are worried that the European debt crisiscontagion is spreading to stronger countries in the Euro zone, as their long-term bond yields have started going up.