It did not take much time to measure public reaction.
Shortly after General Motors announced that former BMW AG executive Carl-Peter Forster would be Adam Opel AG's new chairman, the German media issued their judgment. 'A messiah for Opel,' declared Der Spiegel, the German newsweekly. Since he has been on the job for only one month, that judgment is a bit premature. But the nation's media barons seem pleased that General Motors has chosen a German to run Opel. Moreover, Forster has solid credentials. Forster, 46, ran BMW's engineering and production operations until he was forced out last year in a corporate shake-up.
Now he must revive an operation that lost $448 million last year and suffered a serious loss of market share in its home market, Germany. Forster has not given details of his turnaround plan. But he hints that he will not radically alter the automaker's direction. 'We are not starting from scratch,' he says. 'A lot of things have happened at Opel. I don't foresee that we will create something completely different.'
Indeed, Opel's turnaround is well under way. The company has moved to eliminate excess production capacity, expand its lineup of diesel engines, improve quality and introduce models. Last year, Opel unveiled a redesigned Corsa, and next year it will introduce a Vectra and Omega sedan. If so, why did former Chairman Bob Hendry suffer so much criticism before he retired? The 55-year-old American had prematurely predicted a recovery. GM shareholders were not amused. Shortly after he took the job at Opel, he also undercut himself by making a search for his eventual successor.
Which is not to say that Forster will have an easy time. Over the past decade, Opel has been hobbled by internal power struggles with General Motors of Europe, the organization that guides corporate strategy. The dispute goes back to the early 1990s, when Lou Hughes - General Motors' former vice president of international operations - made plans to expand into new overseas markets. The Corsa turned out to be the ideal product for South America, India and other emerging markets. So Opel engineers worked to design products for these markets.
Meanwhile, European projects fell behind schedule. Opel chief David Herman fought with Hughes for control of Opel's limited engineering resources. This dispute hurt the careers of both men. Herman transferred to Russia, while Hughes was recalled from his Zurich, Switzerland, headquarters to Detroit.
The rumor was that Forster demanded and got assurances that Zurich would not interfere with Opel's operations. But a company source denies Forster was granted special powers. But the source added that Opel has full responsibility for product development, and Forster confirms this. 'Opel is in charge of the brand,' he says. 'And Opel is responsible for Opel products. I think those are the most important aspects.'
Now that Opel's long-term strategy is largely set, Forster will execute that strategy. He must:
Improve Opel's reputation for quality.
Design more daring products.
Improve relations with German dealers.
Produce more diesel-powered cars.
Perhaps Forster's biggest problem is Opel's shaky reputation for quality. The company's image began to suffer in 1991, when the newly introduced Astra suffered severe corrosion problems. The company's product lineup continued to sell well. But the Omega, unveiled in 1993, and the Vectra in 1996, also had quality problems. The Omega's side mirrors and trim sometimes fell off, while Vectra suffered electrical woes.
'At that time, I did not dare sell a Vectra to friends or relatives,' says one Opel executive who asked not to be named.
Perhaps the most humiliating commentary on Opel quality came last year. J.D. Power and Associates, a California consulting firm, issued a poor rating for the Frontera sport-utility. Then Top Gear - a television show based in the United Kingdom - took the Frontera for a test drive. While TV personality Vicky Butler-Henderson drove past a farmhouse, a passing truck dumped manure all over the vehicle.
According to one theory, Inaki Lopez might have caused Opel's subsequent woes when he was named Opel's purchasing chief in 1988. Lopez slashed component prices, but he also upset Opel's traditional ties to German suppliers. Opel began improving quality in 1997, partly by solving problems more quickly after consumers complained. This once took six months or more. Now Opel shortened the time to make such changes by 30 percent, says Opel spokesman Christof Horn. Opel's quality appears to be improving, but restoring an image takes time. Questions about quality persist among dealers as well as consumers. 'Today, it will cost a dealer $135 more than usual to prepare a used Opel for resale,' says one Opel executive.
With Zafira and Speedster, Opel demonstrated it can design daring models. The Frankfurt auto show in September will indicate whether Opel is prepared to take chances. In Frankfurt, Opel will unveil an all-wheel drive Vectra concept with high ground clearance. If built, the vehicle would compete against the Audi Allroad and the Volvo V70. A recreational version of Vectra would give the struggling model some excitement.
The Astra enjoyed a successful launch in 1998, but sales have suffered lately. The car will suffer strong competition from the Peugeot 307 and Fiat Stilo, which feature high rooflines and roomy interiors. Opel may introduce a replacement in 2004.
The Omega is an old model in a dying market segment. Introduced in 1993, its sales have fallen from a high of 120,000 units to 56,000 last year. Opel does not plan to replace it for another three years. Until then, Omega must fend off competition from such luxury carmakers who offer mass-market models.
After a long absence, Opel is returning to the market for commercial vehicles. This month, it unveils its version of the Renault Traffic panel van. To do so, Opel formed a joint venture with Renault, Europe's top maker of commercial vehicles.
Forster's new job represents a redemption of sorts. Forster, 46, had been the likely successor to BMW Chairman Joachim Milberg. But he disagreed with Milberg over the sale of Rover. He wanted to close Rover, not sell it, sources say. Forster left BMW in March 2000.
Forster will be the first German Opel chief in 12 years, after a run of four Americans. Born in London in 1954, Forster speaks English fluently. An urbane and forceful man, Forster is considered a strong motivator. Like his former boss Wolfgang Reitzle, Forster is an engineer with an intuitive sense of the customer's desires. 'He is extremely self-assured, a trait some critics might see as arrogance,' says one former BMW executive who worked closely with him. 'Forster is a fast learner. He is impatient to get rapid results.'
Forster will get some help. Despite years of testy relations with Opel, the powerful metalworkers union has endorsed Forster. 'Opel employees and their elected representatives have high expectations,' says Thomas Klebe, a spokesman for IG Metall.
That is a promising development for Forster, who wants to end the bickering between Opel and General Motors. 'All the mistakes which have been made in the past were made here in Russelsheim,' he says. 'Opel now is in charge of the brand, and Opel is responsible for Opel products. Now, my job is to build the Opel brand.'
E-mail writer Wim Oude Weernink at [email protected]