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 | | Wednesday, 15 August, 2001, 16:21 GMT 17:21 UK GM plans European revival  General Motors has set out plans to return its European operations to profit by shedding thousands of jobs, cutting production by 15% and saving $1.8bn by 2003. GM, the world's largest carmaker, has not yet decided whether to spread the job losses across its European plants or close one big factory. The plans will be finalised in September. The goal is to return the European operations to profitability by 2003, said Carl-Peter Forster, chief executive of Adam Opel, GM's German unit which has seen its market share decline to 12% from 17% in the mid-1990s. GM's other European subsidiaries include British-based Vauxhall. Profits down To achieve a 15% cut in capacity, the car maker will need to reduce output by between 300,000 and 350,000 vehicles.
The European business performed worst of all, losing $154m in the second quarter compared to a profit of $166m during the same three months a year earlier. At least 1,000 job cuts Job losses could be in the "small single digit thousands", said Mr Forster. GM's European workforce is currently about 80,000. Components suppliers are likely to be hard hit by the restructuring blueprint as GM envisages saving $900m on components and other supplies, according to Mr Forster. "We were in a downward spiral that had to be broken", said Mr Forster of the plan, dubbed Project Olympia. The plan to salvage the European operations follows a similar 13% cut-back in the core United States operation, where sales have also been weaker than in previous years. | |
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