When General Motors Vice Chairman Steve Girsky was one of the most respected auto analysts on Wall Street, one of his favorite topics was blasting the previous management of GM for not fixing its money-losing operation in Europe. Back then, in the early 2000’s, GM lost several billion dollars in Europe.
Today, GM is still losing gobs of money ($14 billion total since 2000) in Europe. And now it’s Girsky who is in charge of running GM’s European operations after Opel CEO Karl-Friedrich Stracke stepped down from the job. Girsky has the top job in Europe while the company searches for a permanent CEO of Opel.
I wonder if Girsky ever thinks about some of the critiques he used to write about GM Europe when working as an analyst at Morgan Stanley? He probably does. Now we’ll see if he can do what so many others have been unable to do for than a decade: cut the losses at GM Europe.
It won’t be easy. General Motors needs to close at least one plant in Europe and slash a cost structure that it cannot support given the weak sales in that continent. The problem is that GM Europe has plants in several countries and labor contracts locked in place through 2014, but you can bet Girsky is pushing the labor unions and the governments in Europe to move faster than that.
So what does Girsky bring to the table that Stracke was lacking?
First, he’s an outsider compared to Stracke who rose through the ranks at Opel. He will come in with less baggage and relationships with those who must cut back. Second, Girsky will not be afraid to push GM Europe further. Look for him to be much more aggressive negotiating plant cuts with European labor unions.
As Girsky takes over GM Europe, some on Wall Street are predicting the troubled division will lose at least another $2 billion over the next three years.
Funny, it wasn’t that long ago another analyst on Wall Street, named Girsky, was forecasting continued losses in GM Europe if the company didn’t get its act together.
- By CNBC's Phil LeBeau
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