Howes: GM's Opel on road to recovery, respect

Daniel Howes
The Detroit News

Detroit – Don't tell anyone, but General Motors Co.'s long, dark night in Europe may be nearing an end.

Not because the moribund market there is rebounding or because competitors are stumbling. They aren't, necessarily. No, GM's Opel Group GmbH is engineering its turnaround the old-fashioned way with hard work, new leadership, fresh thinking and lots of commitment from Detroit.

"We are over the barrier," Opel CEO Karl-Thomas Neumann said in an interview this week at the North American International Auto Show. "In the meantime, Opel is seen as the good guy. Opel is seen as a turnaround."

After more false starts and billions lost than interested parties on either side of the Atlantic care to count, this time may be different. Losses are winnowing and market share in Europe has increased in each of the past two years, outperforming the overall market.

Opel posted growing share in bellwether Germany, as well as the key western European markets of France, Italy, Spain and the United Kingdom. Altogether, Opel's share grew in more than a dozen European countries, a feat that seemed impossible for a damaged brand deemed interminably lost.

It isn't, in part because current and former GM leadership finally made a commitment to do what it takes to get Opel right — and stuck with it. That included hard decisions to close an assembly plant in Bochum, the first plant shuttered in Germany since the end of World War II, and replacing top management with outsiders.

It included dropping the Chevrolet brand from Europe, save Russia and the former Soviet republics, because mostly Asian-built bow-tie models competed too directly with Opel, often in the same showrooms. The move demonstrated what one executive close to the situation termed an "unequivocal commitment" to Opel and Europe.

GM underscored that support with high-level executive attention from Detroit and lots of cash. The automaker pledged billions in product investment — $5 billion between 2012 and 2015 alone — that is expected to deliver 27 new vehicles and 17 new engines by 2018.

Most of all, Opel's strengthening turnaround required understanding the power of optics, gesture and honesty, markers of emotional intelligence and smart management that eluded too many senior GM executives over the past generation wherever Opel was concerned.

Not anymore.

"Opel has changed dramatically for the better with the new skilled leadership and a new company culture of fostering a habit of 'winning' instead of 'losing,' " Wolfgang Schäfer-Klug, chairman of Opel's general works council and deputy chair of its governing supervisory board, wrote in an e-mail.

"The transatlantic relationship is so much different than in the past. Today, working jointly for the succcess of Opel and GM is common on both sides of the Atlantic, and the same applies for the improvement of labor relations in Europe."

Getting there took work. When Opel won the prestigious Golden Steering Wheel for its metal, then Vice-Chairman Steve Girsky lifted it high and thanked Opel employees in public and in German. Smart.

A month after Dan Akerson named Neumann in March 2012 to head Opel, GM's CEO convened a board of directors meeting at Opel headquarters in Rüsselsheim — 25 years after the last such meeting. Huge.

When Mary Barra planned her first trip abroad as GM's new CEO, she deliberately chose Opel, a gesture designed to reaffirm the automaker's reconstructed commitment to Opel's people and products as the undisputed foundation of GM's European operations. Savvy.

"We have a very strong team in Germany," Barra said last week, "a very capable technical resource center there. There's a huge opportunity. It's a very important operation for the company. It gets ample attention, as it should."

It didn't for way too long. A series of American CEOs dispatched to Opel in the late '90s and early 2000s managed to alienate the folks in Germany and irritate their bosses back in Detroit with a steady diet of poor business results, mediocre product and anonymous carping in the press, especially in Germany.

Detroit returned the favor by continually whirring the revolving door into Opel's c-suite and serially restructuring the global product development system. Then it used the global financial meltdown-turned-bankruptcy to sell Opel, until it reversed course.

Mistrust reigned. Be it between Opel and GM, management and the German unions, Opel and politicians in Germany and elsewhere, the credibility necessary to sell cars, draw investment and earn support eluded the company on both sides of the Atlantic.

"What I ... found is a habit of losing," says Neumann, who adds his first call about taking the top job at Opel came from Berthold Huber, head of Germany's powerful IG Metall union. "We had to change this culture. Excuses everywhere (about) why it didn't work.

"It was common knowledge that we weren't good and you couldn't trust us," Neumann continued. Management "made commitments which we did not stick to. That just cannot happen."

After securing assurances from Girsky and Akerson that he would sit on GM's Executive Leadership Team, he left his job as Volkwagen AG's head of China to lead Opel. More management changes followed, as did a new leader for Opel's influential labor unions.

"We had quite a history in Germany and you had to get a different approach to turn things around," said Michael Ableson, the GM vice president of global planning and program management who spent the past three years as Opel's vice president of vehicle engineering.

"There was a decision at the corporate level that they wanted to make Europe successful. In some of our history we just weren't willing to dedicate the resources to get the right answer. That's not the case now."


(313) 222-2106

Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.