General Motors named executive vice president Nick Reilly Tuesday as interim head of its Opel/Vauxhall brands in Europe and said it has begun to pay back emergency German loans.
Reilly "will immediately assume responsibility for the operations of Opel/Vauxhall Europe while an external search for a new CEO (chief executive officer) commences," the company said.
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."
Former GM Europe chief executive Carl-Peter Forster is stepping down following the parent group's decision to hang on to Opel/Vauxhall and restructure the companies itself. Forster had backed their sale to Canadian auto parts maker Magna and its Russian partner Sberbank.
Meanwhile, GM also said it has paid back $300 million of a bridge loan provided by Germany to keep Opel running, and would reimburse the balance before November 30. "We now have an outstanding balance of 600 million euros," GM Europe finance director Enrico Digirolamo noted.
German Chancellor Angela Merkel stressed again on Nov. 10 that Berlin wanted its money back after GM chose to keep Opel, a decision Merkel said she "regretted enormously."
German authorities had pushed hard for Opel's sale to Magna and Sberbank because of assurances no German plants would subsequently be shut down, a guarantee that GM has not given. GM's ditching of the sale to Magna caused an uproar last week in Berlin. 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. Opel has tapped only about 900 million of the initial credit however.
GM chef executive Fritz Henderson has said the group would need around three billion euros in financing to restructure Opel/Vauxhall, but also suggested recently that GM might have other means to fund the operation.
Meanwhile, Reilly, a British national who has already worked at Vauxhall, will maintain overall direction of GM's international operations in Shanghai, China, the statement said, further evidence his German stay would be temporary.
Henderson and Reilly toured Opel headquarters in Ruesselsheim, near Frankfurt, and met on Nov. 10 with the head of the workers council. "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."
Reilly, a graduate of Cambridge University, was hired by GM in 1975, and has previously helped turn around operations at the Daewoo brand in South Korea.
Copyright Agence France-Presse, 2009