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GM CEO Henderson starts Opel charm tour in Germany

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GM CEO Henderson starts Opel charm tour in Germany

NOVEMBER 9, 2009 14:02 CET

FRANKFURT (Reuters) - General Motors Co. CEO Fritz Henderson was due in Germany on Monday to start talks aimed at soothing workers' anger over the carmaker's plan to reorganize European arm Opel on its own.

GM plunged Opel into turmoil last week by reversing its plan to sell the business to a Russian-backed consortium led by Canada's Magna International Inc., a deal that Henderson backed but that many in Detroit opposed given a nascent market recovery.

The U-turn torpedoed months of difficult negotiations and infuriated German political leaders and Opel staff.

Emotions are running high among the 25,000 workers in Germany who had hoped Magna would take control of Opel, which they believe GM had long neglected in favor of the Chevrolet brand.

Opel's top labor leader, Klaus Franz, said he wanted Detroit to grant the same degree of autonomy to the European carmaker it would have received under Magna as a precondition for talks on any staff and wage cuts.

"GM does not enjoy any credibility or faith in the eyes of the public or the government, so they now have to consider whether they now want to seek confrontation or cooperation by finding a common solution," Franz said on Sunday.

Chevrolet baggage

Henderson, who was due to speak to management and staff in the Ruesselsheim headquarters of Opel on Monday, was expected to bring along Nick Reilly, the Briton in charge of restructuring Opel until ex-GM Europe boss Carl-Peter Forster is replaced.

In Opel staff's eyes Reilly comes to the job with heavy baggage.

As head of GM's international operations based in Shanghai, he chairs rival GM unit Daewoo, which many in Germany believe has grown in Europe at Opel's expense by exporting cheap Korean-made Chevrolets.

He once served as chairman of Opel's British sister brand Vauxhall, where he announced in 2000 that GM would end car production at its Luton plant.

Opel staff want GM to rebuild trust by committing to long-term investments for new models and powertrains, developing a concrete plan to market Opels outside of Europe and Russia, and installing a European boss who understand what car buyers here want and can lobby successfully for it back in Detroit.

More visible than any other Opel or GM manager in the past six months, Franz enjoys the support of German workers and holds considerable sway with the rest of Opel's European workforce.

Magna's Demel to head Opel?

"Magna wanted to develop a minicar below the Agila, two further niche models, two new engines, a double-clutch transmission and an expansion of engineering R&D," labor leader Franz told a demonstration in Ruesselsheim last week.

"GM's plan foresaw no cabrio, a reduction in the product range, slashing the development budget, and transferring powertrain technology to the V8 specialists in the USA," he said, referring to the hulking engines that find little popularity in the European market dominated by small cars.

Speculation has also begun about who will replace GM Europe chief Carl-Peter Forster, who is leaving after criticizing the board for reversing its decision to sell Opel.

A source at GM said that candidates for the job include Magna's Chief Operating Officer Herbert Demel.

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