Ruesselsheim, Germany — General Motors Co. said Tuesday that Nick Reilly will take over responsibility for the European units Opel and Vauxhall while the company searches for a permanent chief executive.
News of Mr. Reilly's appointment as GM Europe's head came as GM chief executive officer Fritz Henderson wrapped up a second day of talks with officials at Adam Opel GmbH's Ruesselsheim headquarters. He discussed the unit's future, including financing, marketing, product development and production, as well as dealerships and management structures, Opel said in a statement.
GM last week called off the planned sale of a majority of Opel to a consortium of car parts maker Magna International Inc. and Russian lender Sberbank – a solution strongly favoured by the government in Berlin.
Chancellor Angela Merkel said Tuesday in her first address to parliament since being returned to office for a second term that she regretted “General Motors' decision extraordinarily.”
Ms. Merkel insisted that GM present employees with a concrete plan of what is to happen with the company and called for the U.S. auto maker to pay back a €1.5-billion ($2.2-billion) guarantee for a bridge loan granted to Opel earlier in the year.
“We expect General Motors quickly to present a reliable concept that gives Opel Europe and the German sites the chance of a good future,” Ms. Merkel told lawmakers.
Mr. Henderson said in the Opel statement that the unit will be led to its old strength within Europe with a high degree of independence from the parent company.
Workers are demanding to see a business plan for the company through 2014.
“As we announced last Tuesday, Opel and Vauxhall will remain a fully integrated member of the New GM family, a decision that is in the best interests of Opel and Vauxhall, its customers, employees, other stakeholders and GM,” Mr. Henderson said in a separate statement from GM.
“With his deep experience with the Opel and Vauxhall brands, Nick (Reilly) is well suited to lead this transition and to work toward the earliest possible normalization of the business.”
Hans Demant, the GM Europe vice-president for engineering and managing director of Opel, will retain his role leading the Opel management board and will work with Reilly in the transition.
GM Europe chief financial officer Enrico Digirolamo also said earlier Tuesday that the company had begun to pay the bridge loan back.
“Today, a €200-million payback of the Opel bridge loan was made. We now have an outstanding balance of €600-million. We expect to pay the balance before Nov. 30,” Mr. Digirolamo said.
GM's board decided a week ago to abandon the sale of 55 per cent of Opel to Magna and Sberbank – which had appeared nearly a done deal after months of talks.
On Tuesday, Ms. Merkel defended robustly her government's support for a sale to a “strategic investor.”
“Had we not done this, Opel would no longer exist today,” she said. “General Motors was, over a period of months, in no position to even come close to doing justice to its responsibility as the parent company of Opel.”
Germany had promised some €4-billion in further aid to the Magna plan. Officials haven't yet said clearly whether GM can expect any support; they say it is entitled to make an application, which would then be examined.
GM Europe employs some 50,000 workers, about half of them in Germany.
© The Globe and Mail
