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Lutz realizes the best option is an integrated GM-Europe

By Daniel Howes / The Detroit News

Send a seventysomething American guy named Bob Lutz and his, oh, four or five languages to Zurich for a few months and what does General Motors Corp. get?

It gets a sweeping organizational change, likely to be announced as soon as Friday, that breaches national walls across GM-Europe’s Byzantine empire and focuses attention where it needs to be — on delivering vehicles with the panache to compete with European rivals and the quality to fend off the Asians.

That’s no easy task. In a move that would mirror its North American management structure in Europe, the automaker plans to elevate GM-E’s new president, Fritz Henderson, to chairman and name Adam Opel AG Chairman Carl-Peter Forster president of GM-E.

A veteran of BMW AG before taking Opel’s top job, Forster would be replaced by Hans Demant, Opel’s product development boss and GM-E’s vice president of engineering. Yet in a signal of GM’s aim to focus more on operations and less on national boundaries, Demant would retain his regional engineering portfolio.

What does all this mean?

First, it means that GM, after what’s likely to be five straight years of losses in Europe, finally has realized that doing the same thing over and over and expecting a different result really is a definition of automotive insanity.

Each year, Japanese and South Korean brands gain market share in Europe while such storied volume brands as Opel, Ford and VW stagnate. Costs remain stubbornly high, quality is middling, plant efficiency is mediocre and brand identity is confused.

Second, it means that Lutz has succeeded where many before have failed. He’s persuaded Opel’s Germans, or at least those whose opinions matter, that the best chance for future prosperity (if any) lies in an integrated GM-E — not the petty national pride of Opel, Saab in Sweden and Vauxhall in the United Kingdom.

Had GM tried this four years ago, when American Bob Hendry ran Opel but couldn’t bother to speak German, the backlash would have been fierce. German newspapers would be lamenting the “Detroit-Zurich-Ruesselsheim triangle” as if it were evil incarnate. They’d be talking about German corporate law, independence and other introspective navel gazing that is meaningless in the global marketplace.

What a difference a good competitive shellacking makes.

Third, GM is determined to do for Europe what it has done in North America — leverage its size, common processes and extensive distribution network as a hedge against nimbler competitors with fewer labor and cost problems.

In this, GM has an advantage over archrival Ford Motor Co., whose deep roots in the U.K. would draw stiffer natural resistance to any serious attempt to dilute national identities in the service of a broader regional strategy.

Finally, it means that GM’s patience for unacceptable performance is nearly exhausted. For as long as I’ve been paying attention to GM’s European operations (roughly about seven years), things were always going to get better next year or with the next vehicles.

Generally, the cars are better, but the results aren’t. Give Lutz credit for persuading the Europeans that the old ways don’t work anymore and give the Europeans credit for finally acknowledging it.

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