GM’s Europe Problem: Maybe Ex-CEO Saw Writing on Wall

Could it be someone owes Fritz Henderson an apology?

Henderson, you may remember, was elevated to CEO at General Motors after Rick Wagoner was broomed by President Obama’s automotive-recovery team, but his rein atop the bankrupt car maker lasted only eight months.

Reasons for his subsequent dismissal were murky. But in his 2010 book, “Overhaul, an Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry,” Obama point man Steven Rattner contends Henderson’s stand on what to do about GM’s money-losing Adam Opel subsidiary in Europe was a contributor.

The one-time top exec favored jettisoning the operation, and GM began negotiating its sale to a consortium led by supplier Magna and Russian investors. But a few board members, led by current CEO Dan Akerson, disagreed, insisting the German arm could and should be saved. Opel was taken off the block suddenly, just as sale terms were being finalized, and Henderson soon after was shown the door.

Flash forward less than three years later, and Akerson now may have a better appreciation for Henderson’s thinking.

With Opel continuing to hemorrhage red ink, sales volumes shrinking and its brand in bad need of a market identity, a crackerjack team of upper management was parachuted in last year to right the ship – and quickly.

But with strong unions and nationalistic governments intent on protecting their industries, there is no fast fix, as Akerson and crew are discovering.

Instead of immediate capacity cuts, plant closings and jobs reductions to stem the losses, the auto maker has forged a long-term deal with PSA Peugeot Citroen to share purchasing and platform development that will bear little fruit before 2016.

Following a path Henderson once expected to carve, GM now is preparing to put more emphasis on selling Chevrolets in Europe, rather than Opels, possibly even shifting some production of Chevy vehicles from Korea to high-cost Germany in an attempt to soak up a bit of Europe’s considerable unused capacity.

And it is vowing to hold to its labor deal that bars any plants from being closed through 2014.

As a result, the game plan appears closer to standard operating procedure at GM than new-management thinking: Make the best out of a bad situation and try to ignore the clock ticking.

Henderson probably understood it would be tough to dodge that trap when suggesting the auto maker’s bankruptcy might be a good time to cut and run.

Does that mean the former CEO deserves an apology? Maybe, but he probably shouldn’t hold his breath waiting for one.