General Motors' leader in Europe, where the company has lost money for 12 consecutive years, stepped down from the post, the automaker announced this morning.
GM Europe President and Opel/Vauxhall CEO Karl-Friedrich Stracke will "take on special assignments reporting to GM Chairman and CEO Dan Akerson," the company said in a statement without providing details.
GM Vice Chairman Stephen Girsky, who has been overseeing a supervisory board in charge of revitalizing the automaker's European operations, will lead the European division temporarily while the corporation seeks a permanent replacement.
"Karl Stracke worked tirelessly, under great pressure, to stabilize this business and we look forward to building on his success. We appreciate Karl's many contributions to GM's success," Akerson said in a statement.
Stracke's exit from his role in Europe comes as GM continues to negotiate restructuring strategies with various labor groups on the continent. He took over GM Europe from the retiring Nick Reilly in January after serving as chairman of the Adam Open AG management board since April 2011. He'll relinquish both roles.
"I am leaving my current position knowing that Opel/Vauxhall has a bright future," Stracke said in a statement. "And I am looking forward to taking on new challenges for GM and Dan Akerson."
The company plans to close one Opel manufacturing facility in Bochum, Germany, after 2016 and delay worker pay increases while agreeing to avoid layoffs in Germany and invest in product development throughout Europe.
In February, GM said it is buying 7% of French rival PSA Peugeot Citroen as part of an alliance to combine parts purchasing and engineering of certain future vehicles.
But Europe continues to reduce GM's profitability. GM's European operations are expected to lose about $1.33 billion in 2012, $1.07 billion in 2013 and $245 million in 2014, according to UBS Securities.
Akerson told reporters last month that he wants GM's European business to be profitable within five years.
"For whatever reason, Akerson clearly wants Girsky in the job over anyone," Morningstar analyst David Whiston said. "I have a ton of respect for Girsky. I just don't know that he's going to be able to make much difference."
Stracke's resignation comes about two weeks before GM is set to release its second-quarter earnings report, which is likely to show significant losses in Europe. GM lost $256 million in Europe in the first quarter.
Ford, GM's archrival, shocked investors by saying last month that its second-quarter losses from outside North America could triple its first quarter losses.
"I would expect the same pattern to be happening at GM," Whiston said. "They just haven't disclosed it yet."
Like Ford, Fiat and other automakers, GM is handcuffed by strong European labor unions and contracts that make it very cumbersome and expensive to close plants there.
New vehicle sales in Europe are expected to drop to their lowest level since 1995. European governments are grappling with a debt crisis that has dealt a severe blow to consumer confidence and economic vitality. GM's vehicle sales in Europe fell 8.4% in the first five months of 2012, compared to the same period in 2011.
Sales of Opel and Vauxhall vehicles slipped 12.3% to 81,489 units while European sales of Chevrolet, one of GM's two global brands, rose 16.2% to 17,371 units.
GM's stock fell more than 3% to $19.28 at 10:23 a.m., nearing its all-time low of $19 since it went public at $33 in November 2010.
