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By GUIDO RIJKHOEK
Associated Press Writer
GM appoints Reilly to head Opel91 days ago
(AP:RUESSELSHEIM, Germany) General Motors Co. said Tuesday that Nick Reilly will take over responsibility for the European units Opel and Vauxhall while the company searches for a permanent chief executive.
News of Reilly's appointment as GM Europe's head came as GM Chief Executive Fritz Henderson wrapped up a second day of talks with officials at Adam Opel GmbH's Ruesselsheim headquarters. He discussed the unit's future, including financing, marketing, product development and production, as well as dealerships and management structures, Opel said in a statement.
Reilly is currently an executive vice president at GM.
GM last week called off the planned sale of a majority of Opel to a consortium of car parts maker Magna International Inc. and Russian lender Sberbank _ a solution strongly favored by the government in Berlin.
Chancellor Angela Merkel said Tuesday in her first address to parliament since being returned to office for a second term that she regretted "General Motors' decision extraordinarily."
Merkel insisted that GM present employees with a concrete plan of what will happen with the company and called for the U.S. automaker to pay back a euro1.5 billion ($2.2 billion) guarantee for a bridge loan granted to Opel earlier in the year.
"We expect General Motors quickly to present a reliable concept that gives Opel Europe and the German sites the chance of a good future," Merkel told lawmakers.
Henderson said in the Opel statement that the unit will be led to its old strength within Europe with a high degree of independence from the parent company.
The statement said the next step would be to produce a complete business plan for Opel in Europe until 2014, with a solid financing concept, something Klaus Franz, Opel's supervisory board president, said Opel had worked with its own advisers on for the last year and a half.
"As we announced last Tuesday, Opel and Vauxhall will remain a fully integrated member of the New GM family, a decision that is in the best interests of Opel and Vauxhall, its customers, employees, other stakeholders and GM," Henderson said in a separate statement from GM. "With his deep experience with the Opel and Vauxhall brands, Nick (Reilly) is well suited to lead this transition and to work toward the earliest possible normalization of the business."
Hans Demant, the GM Europe vice president for engineering and managing director of Opel, will retain his role leading the Opel management board and will work with Reilly in the transition.
GM Europe Chief Financial Officer Enrico Digirolamo also said earlier Tuesday that the company had begun to pay the bridge loan back.
"Today, a euro200 million payback of the Opel bridge loan was made. We now have an outstanding balance of euro600 million. We expect to pay the balance before Nov. 30," Digirolamo said.
GM's board decided a week ago to abandon the sale of 55 percent of Opel to Magna and Sberbank sale _ which had appeared nearly a done deal after months of talks.
On Tuesday, Merkel robustly defended her government's support for a sale to a "strategic investor."
"Had we not done this, Opel would no longer exist today," she said. "General Motors was, over a period of months, in no position to even come close to doing justice to its responsibility as the parent company of Opel."
Germany had promised some euro4 billion in further aid to the Magna plan. Officials haven't yet said clearly whether GM can expect any support; they say it is entitled to make an application, which would then be examined.
GM Europe employs some 50,000 workers, about half of them in Germany.
___
AP Business Writer George Frey contributed to this report from Frankfurt.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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