GM Europe CEO Carl-Peter Forster to Leave Company

Ft Lauderdale, Florida 11/07/2009 12:55 AM GMT (TransWorldNews)

Carl-Peter Forster, the chief executive of General Motors Europe who runs its struggling Opel unit, has decided to leave the company, two people briefed on the decision said Friday, according to Associated Press.

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Forster, 55, will be replaced temporarily by Nick Reilly, who is now president of GM's international operations who once ran Opel's Vauxhall operations in the United Kingdom, one of the people said. GM will search for a permanent new CEO of GM Europe, likely from Germany, the person said.

The two people asked not to be identified because the decision has not been publicly announced.

The moves come after the GM board decided this week to keep its European Opel and Vauxhall units. The board rejected a plan to sell a majority stake in Opel to a group led by Canadian auto parts maker Magna International Inc. (NYSE: MGA) and Russian lender Sberbank.

One of the people also says that Hans Demant will remain on as managing director and head of the Opel management board.

Forster, who has been GM's top European executive since June of 2004, advocated for the Magna deal before the sale was shot down by the GM board.

Forster's successor will have a difficult task of getting the European operations back on track.

Unions and employees had offered cost-cutting concessions to ease a Magna deal, such as forgoing pay increases, but those offers are now off the table and Opel workers went on strike in Europe, starting Thursday.

GM will face a new battle to secure concessions for its own restructuring plan -- and has raised the prospect of the bankruptcy of the European divisions if all parties don't work to negotiate a viable plan.

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