Educated at Cambridge, Nick Reilly has impeccable manners and a reputation as a skilled negotiator, but these are not the only attributes that have singled out this affable engineer as the potential saviour of the Vauxhall and Opel operations in Europe. Troubled bosses at the headquarters of General Motors in America are aware that Mr Reilly probably knows the business better than anyone.
A GM veteran of 34 years, he spent 15 years in various posts at Vauxhall in the 1980s and 1990s, ending as chairman and managing director for the five years to 2001. He has also served in senior positions within GM Europe’s Zurich office for three years.
His later transfer to Asia to head GM’s joint operations with Daewoo in Korea gave him an unrivalled understanding within the company of international markets and a grasp of the complex cultural challenges of getting the best out of an overseas workforce.
Four months ago, Mr Reilly, 59, was appointed head of GM’s international operations, based in Shanghai, ranking him directly behind Fritz Henderson, the chief executive. His move this week to run GM’s European operations until a permanent replacement is found from outside the company suggests that GM’s resources are stretched to breaking point.
Mr Reilly, who will maintain overall direction of GM’s international operations, replaces Carl-Peter Forster, who left GM a week ago. Mr Forster had criticised the company for reversing a decision to sell Opel/Vauxhall to Magna International, the Canadian supplier, and Sberbank, its Russian partner.
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The professional challenge of saving the European arm of the carmaker comes at a difficult personal time for the married father of three. His eldest daughter, a civil servant with the Foreign Office, has been posted to Afghanistan. He says, with characteristic understatement, that the choice of location “could be better”.
A Welshman, Mr Reilly is a keen rugby fan. He loves hiking, although Shanghai, where he was based, presented few opportunities for this. His other pastime, “listening to music of all types” has also been put on hold for the time being. “I don’t get a lot of time for that right now,” he says, adding that he expects to spend 70 per cent of his time in Europe for the foreseeable future.
With disarming frankness, Mr Reilly says that the company has learnt from the crisis that brought GM to its knees last summer, forcing its American operations into bankruptcy and leaving its European division in need of a €1.1 billion emergency rescue package from the German Government just to stay afloat.
“In the modern auto industry you have to have scale and volume,” he says. “It is impossible for any of our countries to create their own cars separately because it costs so much. So you have to do things in a way to spread costs. Possibly, that process became so much the main focus of the company that we didn’t focus on local differences or on the local incentives that are needed for people to focus on the bottom line.
“We are now making people much more accountable and we are giving them more autonomy locally. This has had a dramatic impact on entrepreneurial spirit in our operations around the world.”
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A main priority for Mr Reilly is to raise morale at the Opel plants. “I have been involved in several recoveries. What makes a recovery successful is getting the workforce motivated and proud of the company that they are working for,” he says.
However, he acknowledges that this task may not be easy in Germany, where Opel’s workforce is feeling extremely bruised, having given its support to the sale of the business to Magna. He is confident, however, that abandoning the sale was the right decision. Even if it had proceeded, GM would have remained a 35 per cent shareholder.
“We were likely to be involved if it went wrong,” he says. “Far better to go it alone, especially now that economic recovery seems more likely. We think there will be less risk with our plans.”
One of Mr Reilly’s first acts on taking over at GM Europe was to meet Klaus Franz, the German union leader, and then Rainer Bruederle, the German Economy Minister, to smooth the waters. Next week he will be in Britain to meet Tony Woodley of the Unite union, whom he knows well from his Vauxhall days, and Lord Mandelson, the Business Secretary.
Another priority is to get a restructuring plan in place “by the end of the year and implemented over the following six months”.
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Mr Reilly will not be drawn on how many jobs will be lost or which plants are likely to close, merely saying that the original plan envisaged 10,000 job cuts.
He believes that it is going to “take some time” for GM Europe to get back into profit, not least because the car scrappage schemes, which boosted sales in Europe, are coming to an end.
And he concedes: “2010 looks like it might be a very difficult year.”