General Motors Co. (GM), the U.S. automaker trying to end losses in Europe, named the chief executive officer of its German brand Adam Opel GmbH to head of all of its European operations, effective Jan. 1.
Karl-Friedrich Stracke becomes president of GM Europe, replacing Nick Reilly, who will retire in March after a 37-year career, the Detroit-based automaker said today in an e-mailed statement. Stracke will retain the Opel post, GM said.
GM is trying to stem losses in Europe that have totaled $14.5 billion since 1999. The company’s European operations earned $102 million before taxes and interest in the second quarter following a first-quarter loss of $390 million, including a writedown of goodwill. Without that cost, GM’s European operations would have generated a first-quarter profit of $5 million.
“The main thing Stracke has to do stabilize Opel,” Jim Hall, principal of Birmingham, Michigan-based consulting firm 2953 Analytics Inc., said in a phone interview. “Opel is the European-cost brand without the luxury of a premium nameplate to offset their higher production costs.”
Stracke, a 55-year-old German native, became head of Opel in April as GM named Reilly, 61, the division’s supervisory board chairman. The automaker opted to keep Opel in November 2009 after its emergence from U.S.-backed bankruptcy, backing out of a German government-brokered agreement to sell the majority of the unit to Canadian parts maker Magna International Inc. (MG) and partner OAO Sberbank.
Reilly “may just be tired, especially with the unmitigated bizarreness that’s gone through GM Europe and all the proposed sales of Opel to parties that didn’t speak the same language,” Hall said.
GM rose 1.7 percent to $24.01 at the close in New York. The shares have slid 35 percent this year.
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