General Motors has named Nick Reilly chief executive of Vauxhall/Opel, as part of a new management board that will run operations worldwide.
The move effectively dissolves GM Europe.
Reilly wrote to all employees of GM Europe (the letter has been produced in full below) and highlights how dealers are the front window of the company and needed to feel like they can have confidence in the brand.
He said: “Nobody knows better what the customer is really experiencing than our dealers, our sales and our aftersales people in the field.”
The letter in full:
At the end of last week I was pleased to announce the members of the Opel/Vauxhall leadership Team that resides centrally in Rüsselsheim. We are joined, of course, by the leadership residing in our country operations. This team is diverse in nationality and expertise but is totally united in our determination to succeed.
Within the management team there will be no silos, there will be mutual trust and support, there will be complete transparency of activities and we will act as one team. We have already begun to define our objectives and the important priorities to move forward. We recognize that we are responsible for the future of our company, we have the necessary authority and we will be held fully accountable for all measures of performance.
Name of the Company:
We have decided that our face to the external world will simply be Vauxhall in the U.K. and Opel in the rest of the world. That will be reflected in the way we apply signage to our manufacturing and engineering facilities, our dealerships, our press events, our business cards etc. In internal communications we will use Opel/Vauxhall when dealing with our pan European activities.
What do we want to be known as? What do we want to aspire to? I don’t want to hire an outside consultant to help us create our own vision statement. We can refine the wording ourselves later if we want to, but here is our working vision statement: “To be a leading European Manufacturer of high quality, desirable automotive products, based on German Engineering, driven by a united team of professionals and respected around the world.”
It is time for Opel/Vauxhall to be clear winners again and to be recognized as clear winners. We need to take bold decisions and be held accountable for those decisions. By taking the right decision, we will reverse the downward trend in market share, we will return to profitability, we will have a brand that people want to buy and be associated with and we will lay the foundations of sustainable success. That is winning.
I believe we already have many of the elements in place to be a winner. We have proven our technical capabilities through our latest products, we have a strong dealer network, we have the skills of our people, we have a great heritage and we have the goodwill of many outside the company who want to see us succeed. We will lead through our products and bring to life “Wir leben Autos”. We will lower our cost levels so that we can be profitable in a weaker market and we will use that profit to reinvest in new products, new technology and new facilities.
How do we get there?
I have said already that we will lead with our products. We know that Insignia was Car of the Year. Have you had the opportunity to drive a 4-wheel-drive Insignia in the snow and ice? I did that this weekend and it was so impressive. I doubt there is another car better. I have already been driving the new Astra in the last two weeks and it is not surprising that it won the Golden Steering Wheel Award. As you all know, we launch the important new Meriva shortly.
But it is also important to recognize where we don’t lead and where we have missing products in our portfolio. The management team has looked at this and, to start with, we are missing an entry in the “mini” segment, we don’t have an identified successor for the Combo, we are not leading in hybrids or pure electric vehicles and our traditional powertrains have mixed performance in fuel economy, CO2 and drive-ability. We intend to address these as quickly as we can.
Having said that, it doesn’t matter how good a product is, if potential customers don’t have a positive image of the company. That positive image comes from a variety of elements as well as the product.
First, we need a workforce that is seen to be working as one team, which is highly motivated and proud to be part of Opel/Vauxhall. This has been damaged by weakening performance and significant losses over the past years, as well as the uncertain future during the past 12 months. I hope that period is now ended.
In relation to the point of working as one team, I very much include the Trade Unions and Works Councils around Europe. During my career, I believe I have always paid particular attention to this very important aspect; I fully respect the role of a responsible union and its leaders. Indeed, I believe unions play a necessary role in any large company. Without the counterbalance of a union voice, there is a serious risk of irresponsible or abusive management. The key here is mutual respect, searching for a win-win outcome, with both parties recognizing the situation facing a company, keeping our open dialogue and then taking responsible actions to move the company forward and grow for the sake of employees and stakeholders.
We must not forget the stakeholders as we build our strong image. Dealers are the front window of Opel/Vauxhall to our customers. Suppliers provide us technology, competitive and high quality components and responsive service. Relations with local and national governments as well as the media are also critical to our reputation. Finally, customers are our most important stakeholders since they keep us in business. They talk to their friends and they can give us their loyalty, so their experiences with Opel/Vauxhall need to be first class.
Also, to help maintain a high image, we should use the long and successful heritage of Opel and Vauxhall and talk about our proven technical expertise which is based in Rüsselsheim, but which also has access to technologies from around the world.
Finally, in our strategies of “How do we get there?” I mentioned in the Vision Statement that we should be respected around the world. This means we need to look for opportunities to sell Opel products outside Europe as well. In the past, Opel has not been able to make money selling outside Europe and the current strong euro will not help. However, I am convinced that with the right product, a strong image in Europe, and enough money to build the business in other countries, we can and will grow our exports outside Europe profitably over time.
We don’t just have to turn our operating results around in normal circumstances. We must deal with a very difficult market environment. In 2010 we expect the Western European market to be 1.5 million units lower than an already weak 2009. So, we need to move fast.
On the reverse side, we will shortly introduce a new campaign based on “Wir leben Autos.” We have a working group putting into words and pictures the definition of the Opel/Vauxhall “DNA” so that all our products, our advertising and our face to the outside world clearly come from the same home. We will share that with you shortly. We will maximize the strength of our new products, we will be innovative in our concept cars at auto shows and we will address the issues of image that I mentioned above. Aftersales must contribute strongly to the results and our dealers need to feel a new confidence in the brand.
On the cost side, as you know, we are working to restructure our manufacturing operations to reduce our break-even point. But we also need to be very cost conscious in all areas, especially in this difficult year of 2010. So, expenditures that can be deferred should be and I have specifically tasked our leadership to reduce bureaucracy all around the company. Examples are to delegate authority for spending decisions lower down the organization, with an emphasis on trust rather than control, and to reduce the amount of time spent in meetings and preparing reports by 50 percent. Also, I want to see the encouragement of ideas from all levels of the organization. Nobody knows better how to assemble a quality car efficiently than the person on the assembly line. Nobody knows better what the customer is really experiencing than our dealers, our sales and our aftersales people in the field.
These activities are not only about one country. Every function and every entity around Europe needs a fierce commitment to make a contribution. We cannot afford to have any country or any product losing money in the long term. We will shortly introduce metrics to show profitability by product and by market and we will then track them regularly.
Relationship with GM North America:
Much has been said about the problems in the relationship between Opel/Vauxhall and our parent headquarters. A greater level of autonomy has been called for. In some ways I agree with this and the pendulum swung too far to the side of a global communality, not respecting local or regional needs and differences of customer preferences. That is why we are stressing the need to have our design and engineering people, together with marketing, ensure the Opel/Vauxhall DNA is in every car we sell and all our external communications.
However, I disagree that we can blame our difficulties on this relationship. This is just an excuse to take the responsibility away from ourselves. It displays a weak victim mentality. While we need the authority and autonomy to make the right decisions for Opel/Vauxhall, we also need to recognize the huge benefits we derive from being part of the GM family. We benefit from the leverage of our global technology, our global architectures, our global purchasing volumes, our global manufacturing process, our global IT systems and so on. We should also not forget that we have been, and continue to be, kept alive during this long period of losses by financial support from Detroit. So, please remember that while we are responsible and accountable for the performance of Opel/Vauxhall, we should also take maximum advantage of being a member of a leading global automotive family. We are better for being part of GM and GM is better for having Opel/Vauxhall.
In closing, I have been impressed since I returned to Europe by how many people outside the company want to see Opel/Vauxhall succeed. There is a lot of goodwill for us and many people will show their support. Now it’s up to us. We have the talents and the capabilities in Design, Engineering, Purchasing, Manufacturing, Sales, Aftersales and all the supporting functions. We need to combine all those skills, head in the same direction, support each other, be good ambassadors for Opel/Vauxhall and work hard.