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The VectraCavalier, meanwhile, was the result of a vastly different reorganization. GM Europe entered the 1980s as a patchwork of competing and often uncooperative concerns stretching from the company's new small-car plant near Zaragoza, Spain, to its aging Vauxhall factories in Luton and Ellesmere Port, England. Before the reorganization, GM Europe was very much a West German-led company. The first goal of the restructuring was to broaden its character, so in 1986 the company moved its headquarters to neutral Zurich. There an amazingly lean head-office staff proceeded to coax the diverse GM Europe factions into cooperating with one another by sharing parts and services. Engineering and design staff were centered in Russelsheim, West Germany.
The company decentralized its marketing divisions, which allowed sales people in different countries to stay close to their customers. "They did it brilliantly," says analyst Keller. "The reorganization of GM Europe was done very gradually, and they were extremely sensitive to nationalities. In GM Europe there is no great central organization."
Because the parent corporation was stingy in investing in GM Europe, the company learned to make every cent count. "Basically these guys had to fight for everything they got," says Opel chairman Hughes. "But the fact is on the other side you've got this gigantic company with gigantic investments to retool all those products. It was too much. If there's a lesson here, it's that smaller is better. It's easier to control."
GM Europe's 200-employee corporate staff in Zurich is known for moving with great speed, notably in its agreement last December to acquire 50% control of Swedish carmaker Saab for $600 million. GM whisked Saab from under the nose of Fiat, which until the last minute thought it would be the successful suitor. GM Europe was also quick to set up a joint manufacturing agreement with Hungarian producer RABA, the first West European company to sign such an accord.
GM Europe's restructuring will give the company a strategic edge as European trade barriers fall. Compared with such competitors as Fiat and Peugeot, which are focused on their home markets, GM's manufacturing and marketing operations are now spread over many markets. "In twelve of 17 countries in which we sell, GM is among the top three producers," says GM Europe president Robert Eaton.
In many respects, GM Europe is a worthy rival to the manufacturers who have become domestic GM's biggest challenge: the Japanese. GM Europe builds small cars and engines that generally match their Japanese counterparts in quality, performance and fuel efficiency. (Only in one area, productivity, is the company seriously lagging behind its Asian rivals.) Why, then, has North American GM failed to import more of Opel's technology and know-how? GM executives in Europe tend to shrug at the question and point to the occasional instance of cooperation. Most notable: the Pontiac LeMans, which is in effect an Opel Kadett built in South Korea by Daewoo and shipped to the U.S. "I wouldn't rule out the use of Opel strategically, let's say if we needed a small car in the U.S.," says John Smith Jr., who as president of GM Europe was largely responsible for its turnaround and now serves as GM's executive vice president for international operations.