GM announces production, jobs cuts across Europe to return to profit by 2003
Wednesday, August 15th 2001, 12:00 am
By: News On 6
BERLIN (AP) _ General Motors Corp. will cut thousands of jobs in Europe and reduce production at its subsidiaries Opel and Vauxhall to save at least $1.8 billion and return to profit on the continent by 2003, the head of its German unit said Wednesday.
GM is considering closing one of its 13 European assembly plants or spreading the 15 percent production cut over several sites, Adam Opel AG chief executive Carl-Peter Forster said, outlining a turnaround plan.
Other cuts in the 75,000-strong work force could come among office and sales staff. Peripheral operations, such as component factories, may be sold or offered for joint ventures with specialist suppliers, he said.
``We were in a downward spiral that had to be broken,'' Forster told a news conference. He said GM's European operation, which includes Britain's Vauxhall, also needs to ``extend and sharpen'' its vehicle range.
He declined to forecast how many staff would go, saying the plan would only be finalized at the end of September. About $900 million is to be saved through cutting the cost of components and other supplies, he said.
Dubbed Project Olympia, the restructuring program is intended to return Opel and GM Europe as a whole to profit. The German unit accounted for more than half of GM's European sales of $25.4 billion last year and employs about a third of its work force.
Forster's predecessor, Robert Hendry, resigned in January after Opel booked a record loss of $460 million in 2000.
In Germany, Opel's market share has dwindled to 12 percent, having hovered around 17 percent in the mid 1990s.
As part of the restructuring plan, Forster said Opel will close up to 30 percent of its 2,000 outlets in Germany and concentrate on selling through dealers running several showrooms.
Opel will also review its sponsorship of Germany's top soccer team, Bayern Munich, he said.