General Motors Co. (GM), the world’s largest automaker, said it will take two to three months to announce a restructuring plan for its money-losing European operations.
Karl-Friedrich Stracke, head of GM Europe and chief executive officer of Opel, told reporters at the Geneva motor show that the automaker sees “high urgency” to fix the unit.
GM, which last year posted a record annual net income of $9.19 billion, plans more cost cuts for its European unit after the last turnaround plan failed to end losses there. The automaker’s Europe business, including the Opel brand, lost $747 million last year before taxes and interest. GM had planned until November for the unit to break even.
“Two to three months I think we need, for sure, before we can speak more precisely on further details,” Stracke said. “We need to engage every stakeholder in the next two to three months to prepare for any decisions.”
The automaker announced last week an agreement to acquire 7 percent of PSA Peugeot Citroen (UG) as part of an alliance that includes joint purchasing and vehicle development in an effort to revitalize their European operations. GM will spend 320 million euros ($420 million), the Detroit-based company said in a U.S. regulatory filing yesterday.
The alliance with Peugeot won’t address to fix GM’s over- capacity issues in Europe, Stracke said.
GM slid 4.9 percent to $24.72 at 11:06 a.m. New York time.
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