General Motors’ vice chairman Steve Girsky has recently been appointed chairman of the Opel supervisory board, a sign that the Detroit-based automaker is very focused on solving its European subsidiary’s problems.
The future doesn’t look too bright for Opel though, as options for restructuring could include a form of bankruptcy, according to analysts and bankers. GM needs to cut Opel’s costs further and that means more jobs may be lost and some plants may be closed. Girsky, an investment banker, could look for new partners for Opel to share costs and may even consider selling the brand once the storm will pass.
The appointment of Girsky at the helm of Opel is a sign that GM takes the crisis in Europe very seriously. “It suggests that fixing Europe is a top priority for General Motors and they are shrinking the chain of command so that Detroit is on top of every detail,” Morgan Stanley analyst Adam Jonas was quoted as saying by Reuters.
Girsky said GM would focus on boosting profit margins and cutting costs by leveraging GM’s global scale. GM officials declined to discuss detail of its plans. GM also named Chief Financial Officer Dan Ammann and Tim Lee, the president of international operations, to the Opel board.
Opel lost $1.6 billion last year and $300 million in the third quarter of 2011. GM dropped its 2011 break-even target for Opel.