Auto giant GM seeks further European savings
VAUXHALL’S parent company General Motors plans to cut costs by a further $500m (£310m) at its troubled European division by 2015 and expects 2,600 job losses this year.
In a trading update, the Detroit-based automotive giant said the it expects its European arm, which includes Opel as well as Vauxhall, is expected to lose $1.5bn-1.8bn this year.
Despite the ongoing problems in Europe, where both the euro zone crisis and over-supply continues to hit sales, GM revealed strong quarterly profits.
It made $1.8bn overall in the three months to September, down from $2.09bn in the same period in 2011, but considerably higher than markets had been expecting.
Of the 2,600 European job losses, GM said that 2,300 had already been achieved via the retirement or negotiated departure of employees.
It said it expected to achieve $300m in savings in its European unit this year, with a further $500m to come over the next three years. GM said that it aimed to break even in Europe by the middle of this decade,
After months of speculation over the future of the 3,000-strong Ellesmere Port plant, GM struck a new deal with trade unions to safeguard its medium-term future.
Instead of axing the Cheshire plant, where the company makes the Astra,
GM plans to cut production by a third at its Eisenach factory in Germany in 2013, while the Bochum plant, also in Germany will close.
GM is not the only carmaker to struggle in Europe. Last week, Ford said it was closing three factories including a facility in Southampton.
