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Opel Workers Welcome GM Management Shake-Up

Employees at General Motors' subsidiary Opel have welcomed the dismissal of the US company's chief executive officer Rick Wagoner as an important step towards securing the troubled German carmaker's future.

Company logos of General Motors and Opel

Changes at GM could have a major impact on Opel

Klaus Franz, the top employee representative at Opel, said he was surprised that Wagoner was not relieved of his post earlier.

"Rick Wagoner stands for an imploded centralist system," he said on Tuesday, March 30, calling the former CEO a symbol of grave mismanagement.

Franz said he looked forward to working with Wagoner's temporary replacement, GM president and chief operating officer Fritz Henderson, because he had significant experience with GM's European units.

Henderson led a restructuring push at Opel from mid-2004 through to the end of 2005, cutting around 10,000 jobs and making the firm profitable for the first time in nearly five years.

New strategies?

Outgoing GM CEO Rick Wagoner

GM CEO Rick Wagoner is stepping down at Washington's request

Other labor leaders, however, have said that while the management changeover is long overdue, it does not present a clear solution to the company's problems since Henderson's plans for the future remain unclear.

"We don't know what concepts General Motors' new management team is likely to pursue," said Rainer Einenkel, the head of the works council at Opel's Bochum factory. "What we do know is that if GM can't find a reasonable solution, then its regional subsidiaries in Europe, including Opel, will suffer. If General Motors fails and goes bankrupt, it will drag Opel down with it."

For months Opel managers have been looking to the German government for assistance aimed at preventing insolvency. But fears that bail-out funds could be funneled away from Opel to GM have left politicians unwilling to give the company, which employs some 26,000 people in Germany, the support it provided to the financial industry.

German Chancellor Angela Merkel is due to visit Opel headquarters in Ruesselsheim on Tuesday, but analysts have said it is unlikely she will announce any concrete plans for the company as long as the future of its US parent remains unclear.

Auto task force

Wagoner's dismissal was ordered by an auto industry task force appointed by US President Barack Obama.

A report published by the task force on Monday rejected General Motors' request for up to $16 billion (12.2 billion euros) in loans.

It said GM had already received $13.5 billion of aid, and that the Obama administration would only continue to fund the company for the next 60 days to allow management to develop a recovery plan.

Obama said if the restructuring efforts do not go far enough, he would have no choice but allow GM to fail and use bankruptcy laws to force the company's reorganization.

"The United States has no interest in running GM," the president said. "What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a much stronger and more competitive company."

Chrysler merger

Obama told the American auto industry's other problem child, Chrysler, that its situation was even worse.

He gave its managers emergency funding for just 30 more days, telling them they must finalize a merger deal with Italian carmaker Fiat, or another suitable partner, or they would be left to fail.

Obama's warning may have been harsh, but it appears to have been effective. Chrysler and Fiat announced they had agreed on a framework for an alliance within 90 minutes of the president's speech.

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