GM Europe Eliminating 2,600 Jobs to Lower Fixed Costs
General Motors Co. (GM) will eliminate 2,600 jobs in Europe by the end of the year as part of plan to reduce fixed costs in the region by $300 million in 2012.
The automaker has already eliminated 2,300 of the positions, which are being cut through early retirement and voluntary severance packages, GM’s European operations said in a statement on its German website. The automaker aims to cut another $500 million in costs between 2013 and 2015.
GM, which aims to break even in Europe by 2015, said today third-quarter net income declined to $1.83 billion from $2.1 billion a year earlier. Industrywide European auto sales will decline 10 percent this year, the most since 1993, according to ACEA, the region’s automotive-industry association.
The automaker, which has now lost $17.3 billion in Europe since 1999, said it will have a deficit of $1.5 billion to $1.8 billion this year in the region. GM said it expects “slightly better” results in 2013. GM is seeking a solution to its woes through an alliance with Paris-based PSA Peugeot Citroen. (UG)
GM is also planning to shutter its plant in Bochum, Germany, in 2016, the first car factory closing in that country since World War II, to trim overcapacity problems. The carmaker reiterated today that it currently has no plans to allocate any additional models to the factory after that date.
GM is not alone in slashing production and jobs in Europe. Ford Motor Co. (F) will shut two plants in England next year and one in Belgium in 2014, cutting 6,200 jobs. Peugeot is eliminate 8,000 positions and closing a factory on the outskirts of Paris to reduce costs. The carmaker, which sold a stake to GM this year to raise cash, received 7 billion euros in bond guarantees last week from the French government.
GM’s German Opel unit is planning to bring to market 23 new models and 13 new motors by 2016, Steve Girsky, who runs GM’s European operations, said in the statement.
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