Turnaround time

General Motors said in a statement from its headquarters in Detroit on Tuesday that Nick Reilly, the head of the US carmaker's international operations would "immediately assume responsibility for the operations of Opel/Vauxhall Europe while an external search for a new CEO commences.”

Reilly, a specialist in turning around troubled operations, "will support the European leadership team in running the business and will oversee the creation of a strategy to position Opel/Vauxhall for long-term success," the statement added.

Former GM Europe chief executive Carl-Peter Forster is stepping down following the parent group's decision to hang on to Opel and restructure the companies itself. Forster had backed their sale to Canadian auto parts maker Magna and its Russian partner Sberbank, a plan which was backed by the German government.

Paying back emergency German loans

Meanwhile, GM also said it has paid back 200 million euros ($300 million) of a bridging loan provided by Germany to keep Opel running, and that it would reimburse the remaining amount before the end of the month.

The government had granted a loan of 1.5 billion euros to tide Opel over, and was set to make another three billion euros available as loan guarantees if the deal had gone through.

"We now have an outstanding balance of 600 million euros," GM Europe finance director Enrico Digirolamo said in a separate statement.

On Tuesday, German Chancellor Angela Merkel once again insisted that Berlin wanted its money back after GM chose to keep Opel, a decision Merkel said she "regretted enormously."

GM was now expected to quickly submit a plan detailing how it aims to get Opel back on its feet.

GM chief executive Fritz Henderson has said the group would need around three billion euros in financing to restructure Opel, but also suggested recently that GM might have other means to fund the operation.

No guarantees on German jobs

German authorities had pushed hard for Opel's sale to Magna and Sberbank because of assurances that no German plants would subsequently be shut down, something that GM has not guaranteed.

Henderson and Reilly toured Opel headquarters in the town of Ruesselsheim near Frankfurt on Tuesday and met with the head of the workers' council, Klaus Franz.

No details have been released of the outcome of those talks.

"As we announced last Tuesday, Opel/Vauxhall will remain a fully integrated member of the new GM family, a decision that is in the best interests of Opel/Vauxhall, its customers, employees, other stakeholders and GM," one of the statements quoted Henderson as saying.

"With his deep experience with the Opel and Vauxhall brands, Nick is well suited to lead this transition and to work toward the earliest possible normalization of the business."

The Briton is credited with helping turn around operations at the Daewoo brand in South Korea in the past.

rb/AFP/Reuters

Editor: Susan Houlton