GM sees profits hit by Europe and currency
AUTOMOTIVE giant General Motors, which this week announced a major sponsorship deal with Manchester United, has reported better-than-expected second quarter results.
The Detroit-based group, owner of the Vauxhall brand, said it made a profit of $1.5bn in the three months to the end of June – down significantly on the $2.5bn it made last year – but more than had been expected.
Its European division, which includes Vauxhall and Opel, reported an operating loss of $361m.
Chief executive Dan Akerson said: “”We clearly have more work to do to offset the headwinds we face, especially in regions like Europe and South America.”
Revenue fell to $37.6bn from $39.4bn as the stronger US dollar hurt results.
The loss in Europe was smaller than some analysts had expected. GM chief financial officer Dan Ammann said Europe remains tough and would not predict when the company would return to profit.
GM Europe is in the throes of a major reorganisation, but this will not – as had been feared – include the closure of Vauxhall’s Ellesmere Port plant, which employs more than 2,800 people.
After a new flexible working deal was struck with unions in May, General Motors will invest £125m in the Cheshire factory a move which will create 700 jobs.
Under the deal announced this week GM’s Chevrolet brand will become the new shirt sponsor of Manchester United for a seven-year term from 2013/14.
The deal has been estimated as being worth around £190m over the course of the sponsorship term.
