Interview: General Motor's Nick Reilly

By TOM MCGHIE
Updated: 09:25 EST, 29 March 2010

When General Motors gave Nick Reilly the task of rescuing Opel and Vauxhall, he must have thought he was facing mission impossible.

Gruelling: Nick Reilly has been shuttling around Europe on his rescue mission.

GM had emerged from Chapter 11 bankruptcy in the US while its European arm had lost billions of pounds and was pledged to be sold to Canadian car parts maker Magna and a Russian bank.

But in a sudden change of heart, GM bosses in Detroit parachuted in their most skilful and experienced executive instead last November and ordered him to restructure and save Opel and Vauxhall.

Reilly, 60, a softly spoken Welshman who had just turned round GM's Asian operation, had to come up with a plan to make 10,000 redundancies. He had to shuttle around Europe, pleading for government support to help save the operation.

Even for a high-powered executive that was tough, but Reilly had other worries closer to home. Throughout this period, his eldest child Tasha, 31, a high-flyer in the Foreign Office, has been living and working in probably the most dangerous place on earth - Helmand province in Afghanistan.

Reilly, who has two younger sons in their late 20s, admits: 'It has been a little worrying.

'She lives in a reconfigured container - something like a steel pod. But at least it is not for much longer. She is leaving, though she is being sent to Pakistan. I hope that is safer.' The months of shuttle diplomacy between Britain, Belgium, France, Poland and Germany have started to pay off.

'Most of the pieces in what I call the jigsaw are falling into place,' he says. 'In a month or so everything should be agreed.' One piece, Britain, is firmly in place. Reilly has had no problems in coming to a deal with the unions here or with the Government, in the form of Business Secretary Lord Mandelson.

Reilly has some advantages in sorting out GM's British operation. In 1996, as chairman and chief executive of Vauxhall, he used to run the Ellesmere Port factory in Cheshire, which makes Astras, and the company's van plant in Luton, Bedfordshire.

Perhaps more importantly, he knows and respects Tony Woodley, leader of the Unite union, who used to work at Ellesmere Port like his father before him.

When Reilly came to sort out the restructuring package with Vauxhall, he negotiated with Woodley. 'What I can say is that we have been helped by our relationship with the unions,' he says.

Details of those talks have never been revealed, but suffice to say Ellesmere Port, where the bulk of Vauxhall's 5,500 workers are based, survived. Production is set to increase and more workers may be taken on.

No doubt this relationship was also one of the reasons why Mandelson was so quick to guarantee favourable loans to Vauxhall. GM's electric car, the Ampera, will go on sale in Europe next year and Ellesmere Port is hopeful of landing the production contract. One senses that though Reilly has great pride in the British operation, as a good company man he cannot be seen to be partial to the land of his birth.

Although educated at Harrow and Cambridge, after 35 years at GM, partly in Detroit, he has acquired a mid-Atlantic accent, which he employs at his new workplace, outside Russelsheim near Frankfurt, where he holds board meetings in English.

His loyalties, however, must be stretched by problems in Germany, where half the 50,000 GM Europe workers live.

The Berlin government and German unions are still smarting from the decision by GM to abandon the sale to Magna. In a deal described as a 'stitch-up' by British unions, Germany had agreed to bail out the new company in exchange for no redundancies. Now thousands of German and Belgian workers face the axe, but GM still wants state help and negotiations are tough.

But would Reilly consider expanding the British operation if the Germans did not reach a deal? 'No, I don't think so,' he says. 'As I said, this is a giant jigsaw. We would have to change things, but we won't pull out of Germany.' Apart from sorting out the restructuring and talking to governments, Reilly is also trying to boost sales. His task is made that much more difficult by the ending of scrappage schemes, where governments have given consumers cash to trade in their old bangers.

'I said that 2010 would be difficult and it is, although production is up at Ellesmere Port,' he says. 'We are in talks with Renault and I am reasonably confident we can do a deal to keep work going at Luton beyond 2013.' That is the date when the agreement with the French vehicle giant to build commercial vans comes to an end.

REILLY is confident that new models - 80 per cent of the range will be new within three years - will spearhead a revival so that by 2012 the company will be making 'some decent money'.

But the real future for the industry, Reilly predicts, is in electric cars. 'By 2020, 20 per cent of all cars will be electric or hybrid.' This is a far higher figure than predicted by other car industry leaders. He bases his judgment on the dramatic advances in battery technology and also the speed at which costs are coming down.

'Two years ago we said they would come down by 50 per cent in ten years,' he says. 'We now believe that they will come down by 70 per cent in just three years.

'The Chinese are spending huge amounts of money on battery technology.

They will soon be leading the world and starting to export.' But while he dreams of an electric future, it is the reality of keeping Opel afloat that keeps him awake at night.

For his wife, Susie, who has just about reconciled herself to the move to Germany, there is the first holiday for a year to look forward to. 'We are off to Greece for a week in June,' he says.

The jigsaw pieces by then, one assumes, will all be in place.'The jigsaw is falling into place. In a month it all should be agreed'