Howes: GM’s Opel finds path from automotive wilderness
Rüsselsheim, Germany — Delusion may be done here, finally.
Gone is the assumption that the lords of Detroit can dictate unilaterally what is best for Opel Group GmbH, epicenter of General Motors Co.’s operations in Europe. No longer is the CEO’s office here occupied by an American with inside ties to the top of the Renaissance Center, but little aptitude for what makes a German automaker tick.
After more than 15 years wandering in the automotive wilderness, and accumulating something more than $15 billion in losses, GM’s Opel looks to be more on track than any time since its glory days in the early 1990s. That’s when the automaker in this small company town west of the Frankfurt airport generated most of the parent company’s profits.
Now Opel is winning awards for its once-dreadful marketing and for its cars, last month claiming AutoBild’s coveted Golden Steering Wheel for the new Astra compact. Its losses are winnowing and European market share is creeping back up, despite the high-profile decision to exit the unpredictable Russian market.
Funny how things can improve when people in charge on both sides of the Atlantic face reality. They understand that Opel cannot go it alone, a proposal explored during GM’s 2009 bankruptcy. After serial executive failures, they embrace the need to recruit fresh talent with German roots and demonstrated success in the German auto industry.
They finally grasp the futility of foisting essentially competing brands — Opel and Chevrolet — on the same market and expecting consumers far more accustomed to one than the other to know the difference. They know they must execute a plan that tackles Opel’s two biggest problems — management dysfunction and a tarnished brand image — and reinforces Detroit’s long-term commitment.
They’re doing all of it, evidence of former Vice Chairman (and current director) Steve Girsky’s vision for Opel and CEO Mary Barra’s continuing commitment to it. Without high-level, sustained backing from Detroit, Opel’s new management team would struggle to complete a restructuring centered on what the marque is and can be.
And with Volkswagen AG’s diesel scandal likely to deepen and spill into a controversial effort to cut its bloated workforce — the third-rail of the German auto industry — Opel arguably is positioned to steal more share and continue to rehabilitate its reputation in the process.
“Many things were broken,” Karl-Thomas Neumann, the CEO of Opel who arrived from VW in March 2013, says over a lunchtime interview in Adam Opel Haus. “Marketing and sales were destroyed when I came. We didn’t have good people. We needed to bring in fresh talent.
“The turnaround is doable. Never said it was easy, but it is doable,” he continues. “Product perception. Brand perception. We can win market share, but very little. It goes slow.”
But at least it’s going at a time when the company could make meaningful gains. For too long, Opel proved a transatlantic battleground pitting clueless American executives in Detroit against clueless Germans here, often goaded by a top labor leader, now gone, and others who elevated whining and pot-stirring via media leaks to high art.
The enterprise suffered. The cars and the brand; the relationship with the parent company; Opel’s image within the German auto industry and its connection to the German government. So did GM’s reputation for effectively managing, or not, a highly visible unit in arguably one of the most car-conscious markets in the world.
Opel, following years of exchanging blame with Detroit, is attacking its deficits head-on. Product developers are pushing to add more refinement to new interiors, or to use LED lighting configurations seldom found on German luxury cars to distinguish new Opels as “not cheap but not luxury.”
Says Neumann: “We have 150 years of history. We are German engineers. We’re trying to position Opel where it deserves to be. We not only want to be good; we want to be the best.”
One step at a time. A bias for risk is replacing one that prized stability, predictability and apparent fealty to Detroit. Case in point: 20 years after the parent company toyed with soap company executives to manage many of its U.S. brands, Opel hired a new marketing boss plucked from — gasp! — the shampoo business.
Yet Tina Müller and her team now are considered one of the most innovative marketing groups in Germany. Credit a campaign that tackles directly Opel’s perceived shortcomings, urging would-be consumers to “reshuffle your head,” or Umparken im Kopf.
Put another way: challenge perceptions and compare them to reality. Keep it up, and they’ll be saying the same about a brand GM not too long ago was preparing to leave for dead.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.