The departure of GM Europe CEO Michael Burns for US-based supplier Dana Corp. comes at a crucial time for GM's operations in Europe.
GM Europe, which includes Opel and Saab, has been racking up losses for four years in a row and 2004 is supposed to be the year it turns the corner.
But Burns is not going to be around to see the results of his five years in Europe.
His successor, GM Asia Pacific President Fritz Henderson, 45, who will arrive at GM Europe's Zurich headquarters June 1, must ensure the company meets its financial goal of breakeven or a small profit in 2004.
Henderson will have a full plate. He must further implement the GM-Fiat powertrain alliance and decide whether to product a future premium model, the Opel Insignia.
But his first order of business will be making sure the planned March launch of the Opel Astra gives GM Europe the boost it needs.
A turnaround at loss-making Opel is at the core of GM Europe's 3-year-old Project Olympia restructuring plan.
"Opel's German operations will be Henderson's greatest worry," a GM Europe source said.
Shrinking market share
Opel's German market share last year sunk to 10.3 percent from 17 percent in 1995.
Opel lost E384 million in 2003, while in 2002 the loss was E227 million.
When launched in 2001, Project Olympia set 2003 targets for production cuts, cost reductions and profitability.
The company mostly met the first two goals, but failed to meet its 2003 profit target, hurt by exchange rates and difficulties at Opel.
Under the Olympia turnaround plan, GM's UK Luton assembly operations were closed; smaller assembly plants in Poland, Turkey and Hungary were closed or scaled back.
Plants at Antwerp, Belgium, and Bochum, Germany, each closed one assembly line and improved the productivity of the other line.
GME also found more than $1 billion (currently E800 million) in cost savings and reduced staff to 63,000 last year from 88,000 in the late 1990s. But the improved revenue needed to find the additional E1 billion in targeted cost savings hasn't yet happened.
Starting March 1, Bob Lutz be interim CEO of GME until Henderson arrives.