COMMENT: Tackling GM Europe's problems with a giant ax is counterproductive

Don't gamble away German consumers loyalty to Opel

People in Germany listening to what GM Europe president Carl-Peter Forster is saying from the company's headquarters in Zurich can hardly believe their ears.

"The two biggest German Opel factories are our least competitive," announced Forster recently. By saying that he consigned to the trashcan the assurances he made as Opel's boss. Two years ago Forster said he wanted to steer Opel to a rosy future with the Project Olympia cost-savings program.

Forster said Project Olympia was bringing Opel and GM Europe back on the right track with its program to restructure Opel's distribution network, boost productivity and improve capacity utilization.

His marketing chief Uhland Burkart also said everything was going according to plan, if not better than planned. However, poor sales figures cost Burkart his job and in hindsight it appears that Forster tackled Opel's problems with too soft a touch.

In his new role Forster now looks at Opel from a wider European perspective and he also has GM Europe Chairman Fritz Henderson - named by one German daily newspaper as "the Rumsfeld of the car industry" - breathing down his neck.

GM Europe is blaming the weak auto market for its current problems - at least that's the conclusion to be drawn from large advertisements placed by the company in newspapers. In the advertisements there is no mention of management errors.

Henderson and Forster aim to radically restructure GM Europe for the future with a clear-cut plan, which pledges that valued Opel and Saab customers will continue to be offered first-class cars.

GM Europe's top management is not happy with German newspapers, which are publishing details of how the automaker's radical cuts will affect Opel's factories and workers.

Like a teacher lecturing unruly students, they accuse the newspapers of "irresponsible speculation" that could damage delicate discussions.

However, GM Europe's method of tackling its problems with a giant ax is also counterproductive. The company is juggling with the future of its factories and firing thousands of workers before discussions with workers' representatives have even started

GM Europe's heavy-handed methods have also upset potential customers, who fear cost-cutting will hit vehicle quality, Opel dealers say. That blow comes just as Opel is starting to improve its brand image.

Rival automakers such as Volkswagen and Ford are rubbing their hands with glee despite their own problems.

Opel is lucky that its recent maneuvers have not led to a consumer boycott. Automobilwoche's own research has show that Opel's customers remain faithful to the brand.

Henderson and Forster should not gamble away that loyalty.

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