Lutz, Forster at odds over Opel's future

Two key figures who are hoping to shape the future of Opel last week showed where their loyalties are.

GM Vice Chairman Bob Lutz visited Germany and told the country's parliamentarians that the U.S. carmaker wants to keep Opel, the Frankfurter Allgemeine Zeitung reported.

That may have prompted GM Europe President Carl-Peter Forster to give interviews to some of Germany's leading newspapers that clearly showed his preference for GM to sell Opel to Canadian supplier Magna International.

Two years ago, it was widely reported that then-GM Chairman Rick Wagoner had told Forster that he would be taking over Lutz's former role as GM product development chief when the veteran executive retired. GM's woes killed that idea.

Forster's future likely now lies outside GM -- Magna wants to keep him as Opel's head if it wins the control of the unit.

Lutz is said to lead a faction of “hawks” within GM along with global development chief Tom Stephens and GM's Opel negotiator John Smith. They want to keep Opel despite GM signing a preliminary agreement with Magna and the German government in May to sell a majority stake in Opel and British sister brand Vauxhall to Magna's Russian-backed consortium.

The “hawks” oppose GM CEO Fritz Henderson's plan to shrink what was until recently the world's biggest automaker and concentrate on rebuilding its U.S. market share. They still see GM as a global player that needs a presence in Europe and in Russia where GM's Chevrolet brand is the second biggest brand by unit sales after Lada.

Lutz and his supporters are worried that Magna may pass on future technologies to its industrial partner GAZ, Russia's second largest domestic automaker. Magna says this won't happen.

But Forster won't have allayed their fears when he told the Frankfurter Allgemeine Zeitung that Opel under Magna ownership could develop with GAZ a low-cost family sedan similar to Renault's successful Logan, although he stressed the car would not use the latest technologies.

GM's board will discuss Opel's future again on Tuesday. Retaining the German-based unit would be expensive. GM would have to pay pack a 1.5 billion euro German government loan and find at least 3 billion euros to restructure the unit as well as billions more for future investments.

All that for a business that likely to make a 2.4 billion euro pre-tax loss this year with its revenue dropping 20 percent to 16 billion euros and its new-car sales will falling 20 percent to 1.25 million, according to the Frankfurter Allgemeine Zeitung.

Tags: Opel

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