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4-Traders Homepage  >  Equities  >  Nyse  >  General Motors Corporation    GM

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General Motors Company : New labor leader at GM's Opel a break with past

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01/17/2012 | 07:04pm CEST

General Motors (>> General Motors Company) Chief Executive Dan Akerson has a new partner to help fix his loss-making European unit Opel; a lanky German sociologist-turned-labor-leader with a reputation for avoiding the spotlight.

Wolfgang Schaefer-Klug, a 50 year-old Ph.D. scholar from Darmstadt, Germany, is an expert behind-the-scenes operator who enjoys excellent connections within the upper echelons of the company, its manufacturing plants and unions across Europe.

Instead of immediately playing to his hardline German base to bolster his credentials ahead of a new restructuring plan, Schaefer-Klug has signaled a wish for detente with management so he can hammer out a win-win solution.

He shares Akerson's goal to turn Opel into a sustainable profit contributor, but maintains Detroit must respect a labor contract that protects jobs and plants in Germany through 2014 and refrain from lay-offs elsewhere.

The emphasis on finding common ground with headquarters embodies a different approach from his predecessor and mentor, Klaus Franz, a charismatic but pugnacious former paintshop worker who let GM's U.S. executives have both barrels for what he considered their heavy-handed treatment of Opel.

STRENGTH AND WEAKNESS

But Schaefer-Klug's biggest strength, operating below the radar to get things done, is also his biggest weakness.

Largely unknown to workers on the shopfloor until his nomination, he has a much lower profile among the German base than many of Opel's other senior labor leaders, such as Rainer Einenkel, whose workforce launched a wildcat strike at the Bochum plant in Germany several years ago in protest at job cuts.

Although being perhaps Franz's closest confidante -- travelling with him to meet former GM CEO Ed Whitacre for example -- Schaefer-Klug was actually elected by his fellow German employees to the works council for the first time only in 2010.

For many workers on the assembly line, their new chief envoy is still a blank page, even if he is Franz's anointed successor.

"The people on the shop floor don't know him yet, but they say, 'He's Franz's guy', so that gives him a measure of credibility from the outset," said one German works council official from another plant, adding the jury was still out.

A technocrat hired by Opel's works council in 2000 as an advisor after finishing his dissertation on transportation policy two years earlier, Schaefer-Klug represents a "break with tradition," according to the official.

Under normal circumstances his low profile might not be a problem, but the carmaker is behind schedule in its turnaround plan, and the 40,000-odd European employees whose interests he will have to defend fear another round of job cuts.

The retirement of Franz leaves Opel without its most recognizable standard bearer and unifying figure. Franz enjoyed unwavering loyalty among his base for shepherding Opel largely unharmed through GM's slide into bankruptcy in 2009.

Franz's influence extended beyond the factory gates. He managed to convince German Chancellor Angela Merkel to give Opel a last-minute emergency loan against the advice of her own economy minister just before parent GM filed for Chapter 11.

Rudi Kennes, an advisor to the head of Belgian union ABVV-FGTB who knows and values Schaefer-Klug from their times touring GM's European operations, warned Detroit not to underestimate him nor attempt to capitalize on the change in leadership.

"It would be a mistake if GM tried to use this to their advantage," he said.

CHEVROLET THE ANSWER

Schaefer-Klug's most pressing challenge will be how to best support Akerson's restructuring plans for Opel, one of many carmakers in a crowded European volume segment beset by chronic overcapacity, razor-thin margins, incentive wars, political interference and powerful labor unions.

Akerson picked his top lieutenant, Steve Girsky, to oversee Opel as chairman and appointed two other senior executives including his finance chief to the board in November in order to gain better control over the wayward subsidiary.

"GM is now more strongly represented on the supervisory board of Opel and therefore is our most immediate negotiating partner," Schaefer-Klug said in comments emailed to Reuters on Friday, suggesting the first name in his address book will be Akerson, not Bob King, the head of the United Auto Workers union.

"We are open for a closer cooperation with the GM management on the board."

Yet analysts widely believe that Opel's brand equity is not strong enough to sustain a production base top-heavy with German workers -- a profile more typical of luxury carmakers -- while lacking the geographical sales footprint of a Volkswagen (>> Volkswagen AG).

Reuters reported exclusively on Wednesday sources as saying that Schaefer-Klug would offer his workforce's full support to management when rooting out and eliminating non-wage costs in exchange for bringing production of Chevrolets destined for Europe from Asia to local Opel factories.

(Reporting by Christiaan Hetzner)

By Christiaan Hetzner

Stocks treated in this article : General Motors Company, Volkswagen AG
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