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Home > Car Makers News > Other > Reilly's world is growing larger | detnews.com | The Detroit News


Reilly's world is growing larger | detnews.com | The Detroit News


Nick Reilly, executive vice president of General Motors Co., works out of a skyscraper in Shanghai, a Chinese port city halfway across the globe from the company's Detroit headquarters. Most of his senior-level GM colleagues are asleep when he's working, and they arrive at their offices as he's preparing to go home.

Even though Reilly is far away, he is emerging as GM's second most important executive after CEO Fritz Henderson. As the new head of GM's international operations, the British executive runs overseas units crucial to GM's long-term success.

Sales outside the United States outpace those of GM's shrinking U.S. operation, accounting for 72 percent of second-quarter sales this year. The international business also has been more profitable, and recently, some overseas units have taken a crucial role developing and engineering cars for GM.

But increasingly, key parts of GM's international business are managed through alliances with other manufacturers. GM has equity partners in South Korea and China, and its board will review a deal next week to sell a majority stake in GM's struggling German carmaker Adam Opel GmbH.

Managing under such circumstances requires a special mix of skills: an ability to work across cultures and balance priorities to keep all parties feeling content and fairly treated.

"It can be hugely successful because you're putting the resources of two companies together, but it can go quite badly wrong," Reilly said in an interview during one of his monthly trips to Detroit. "Quite a significant part of my job is to make sure that those relationships are nurtured."

His job also entails deciding when and where to draw the line, to protect GM's interests and proprietary technology from partners who may feel emboldened by GM's bankruptcy and financial woes.

In recent negotiations over the sale of an Opel stake and financing for GM Daewoo Auto & Technology, GM's current and prospective partners adopted a sharp tone with the automaker.

"GM is seen as vulnerable right now, and there are aggressive groups, particularly in emerging markets, that see it as an opportunity," said Michael Dunne, managing director for J.D. Power in China. "It's a tough business."

Reilly, 59, was already in charge of GM's Asia Pacific region when Henderson decided to combine the foreign operations under one executive.

In Reilly's 34 years at the automaker, he managed a variety of sales and manufacturing operations and businesses in Europe and Asia in a trajectory similar to Henderson's.

"Nick taking the lead was an easy call," Henderson said. He pointed to Reilly's experience and contributions to some of GM's most successful operations.

Warren Browne, a former head of GM Russia who is now retired, said Reilly was right for the job. "He's got the personality and the business savvy to deal with complexities -- and that's code for joint ventures," Browne said.

'He'll be very direct'

People who have worked with Reilly say he's an intelligent, balanced, matter-of-fact manager who lets his subordinates get on with their jobs. He's good at building teams, they say, and he takes the time to socialize.

He also can be tough. "If there are things that he thinks are going off track, he'll be very direct," said Nancy Owens, a vice president of human resources for GM's international operations. "But he's not someone who instills fear."

Reilly said he had come to the conclusion that the success of an operation depends on how well its employees are able to function. "The senior management needs to be humble and seek the opinions of the people who are really the value-added part of the company," he said. "I'm one person, and we've got thousands of people so we need to get them to be very effective."

In the nearly four months since Reilly took over the international operations, he has stepped up the pace of decision-making and cut out nonessential activities. The monthly meeting of 20 or so executives reporting to him has been shortened from two days to two hours.

Even though the overseas operations didn't go through bankruptcy along with the U.S. business, they are undergoing a similar re-invention. "We don't want to regard it as a new GM just in the United States," Reilly said.

Keep partnerships intact

For now, Reilly's priority is to hold together the partnerships that control key operations, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "His role is essentially to try to keep their global development system functioning."

That is one of GM's chief competitive advantages over its domestic rival, Ford Motor Co. Ford has sold most of its foreign brands and relinquished control of Japan's Mazda Motor Corp. The Dearborn automaker has implemented a global vehicle development process, but it lags GM's by two to three years, Cole said.

To the extent that Reilly can't keep the alliances from fraying, "he has to protect GM's intellectual property," Cole said.

GM's board will consider these issues next week when it reviews the proposed sale of a majority stake of Opel. After long negotiations, GM agreed to sell the cash-strapped carmaker to Canadian supplier Magna International Inc. and its Russian partner Sberbank in a deal backed by the German government.

GM seemed at one point to favor a simpler two-way deal with an industrial holding group, RHJ International, but it was in a weak bargaining position. It was reluctant to spend U.S. taxpayer money abroad, and it had other units struggling in the downturn.

"GM doesn't have as many levers to pull as it used to, and is under many more constraints," said Michael Robinet, vice president at CSM Worldwide in Northville.

But GM couldn't let Opel fail. The Rüsselsheim-based carmaker essentially developed the architecture for all of GM's new compact and mid-size cars, including the important Chevrolet Cruze compact.

The board's review comes amid concerns raised by a European Union commissioner that Germany may have pressured GM into a deal with Magna.

But by now, GM's top managers have lined up behind the deal. "As Fritz said, we think the best thing to do is to keep trying to close the deal with Magna, and hopefully that should be done pretty soon," Reilly said.

GM is prepared to share Opel technology with Russian automaker OAO GAZ, with whom it has previously held negotiations, but GM executives are resisting suggestions that Russia's auto industry might be consolidated around Sberbank's Opel stake.

"We have been careful to define where the technology that Opel has -- which, by the way, is effectively access to all of GM's technology -- where that can be used," Reilly said. "Clearly we don't want a free-for-all."



[source]


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