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Impatient General Motors

July 13, 2012

General Motors has grown increasingly impatient with reforms at its European division, comprising carmakers Opel and Vauxhall. The resignation of Opel's chief came on the back of a sales disaster this year.

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New cars in front of the Opel plant in Bochum
Image: Reuters

German automaker Opel's sales dipped by about 8 percent in the first half of 2012, the mass-circulation Bild newspaper reported on Friday. New registrations of Opel vehicles in Germany went down by 9.3 percent over the same period.

Analysts said there could be no doubt that the carmaker's sales problems were the number-one reason for the surprise resignation of Opel chief Karl-Friedrich Stracke on Thursday. Michael Robinet of the IHS Consulting Firm near Detroit in the US said Opel's parent company, General Motors, had grown more impatient with the slow pace of change in its European division.

"Change of leadership denotes a new direction is required, maybe a new speed at which some of the necessary changes occur," Robinet told the Associated Press. "It also signals to labor that there's a new sheriff in town."

Zero profitability

Opel and Vauxhall in Britain have been a drag on GM's earnings for 12 years, including a $256 million (210 million euros) loss in the first quarter of this year and $747 millions in losses throughout 2011. The hottest candidate to turn things around by becoming Opel's new CEO is the head of the auto maker's strategy department, Thomas Sedran.

The works council of Opel's production facility in Bochum, Germany, warned against kicking off yet another round of speculation about plant closures in the wake of the management reshuffle. "Such a debate would only unnerve employees and upset potential clients, meaning a dent in our image that could not be repaired," Works Council chief Rainer Einenkel said in a statement.

He called on GM to finally allow the selling of Opel cars on non-European markets and urged a strategic sales offensive with new brands.

hg/slk (Reuters, AP, dpa)