Tuesday, August 25, 2009
GM Board and Opel
At first, one might react with dismay at the drawn-out process by which GM has tried to sell Opel - its European division. However, recent reports indicate that the new GM Board has rejected management's proposal to sell Opel to Canadian auto-parts manufacturer Magna. The board apparently has pushed management to consider other options, including raising new financing so that the company could retain and restructure Opel. While it's not at all clear whether or not retaining Opel makes sense, one may be heartened to hear that the new GM Board is being vigilant in its governance duties, and not simply rubber stamping management's proposal to sell Opel to Magna. It seems that the board has asked some tough questions and been willing to push back on a key management decision about which board members had serious doubts and concerns.