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Posts Tagged ‘gm europe losses’

Opel Plant Closes in Bid to Save GM Europe

Bochum plant victim of desperate turnaround bid.

by on Dec.05, 2014

The Bochum, Germany plant, which produced the Opel Zafira, was closed by Adam Opel.

General Motors has taken a critical step forward in its bid to salvage its money-losing European operations, shuttering an unneeded plant in Bochum, Germany.

The closure of the factory, which once employed as many as 22,000 workers, is central to a bid to reverse 15 years of losses by the Adam Opel subsidiary. At the same time, GM plans to invest 4 billion Euros, or nearly $5 billion into its European business to expand its product portfolio and improve the competitiveness of its remaining factories.

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The maker now says it expects to achieve a break-even at Opel by mid-decade. But that goal has been delayed so long that industry analysts are playing wait-and-see before declaring GM’s latest turnaround strategy a success. (more…)

GM’s New CEO Sees Turnaround in Europe

China, meanwhile, provides “great opportunities.”

by on Jan.24, 2014

New GM CEO Barra said she expects the company's European unit to be profitable by mid-decade, but said there is no firm deadline for that to happen.

The massive losses racked up over the last 16 years in Europe pose one of the toughest challenges handed over to GM’s new CEO Mary Barra.

But while the new chief executive officer says she has no hard and fast deadline for completing the turnaround of GM Europe and its principal subsidiary, Adam Opel AG, she is optimistic the worst is over.

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“We said we expect GM Europe to be profitable by mid-decade,” the 52-year-old Barra told reporters during a meeting at the company’s headquarters in Detroit’s towering Renaissance Center. “Obviously it’s important to operate profitably everywhere we operate,” she said. (more…)

GM Reports $1.2 Billion in Q2 Profit

Maker cuts losses in European operations by $300 million.

by on Jul.25, 2013

GM reported $1.2 billion in Q2 profits.

General Motors managed to reduce losses stemming from its European operations, however, the Detroit-based automaker still saw its net income drop 20% to $1.2 billion, or 75 cents per share, in the second quarter compared with the year-ago figures.

The earnings are similar to those of Ford, which also reported earnings of $1.2 billion. But the biggest difference is that those results were an 18.5% improvement over the previous year’s results.

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On a positive note, GM’s revenues increased by 3.9% to $39.1 billion and earnings before interest and taxes also increased 7.4% to $2.3 billion.


Opel Speeds Up Restructuring, Will Close German Plant Early

GM takes advantage of union misstep.

by on Apr.19, 2013

An Opel Zafira body moves along the line at the Bochum assembly plant.

General Motors’ long-troubled Opel subsidiary plans to close an unneeded plant in Bochum, Germany by the end of 2014, a move that will come several years ahead of its original plan thanks to a major misstep by the powerful metalworkers union IG Metall.

The move could be critical as Opel moves to speed up a broad restructuring strategy aimed at capping what is likely to be a 15th year of massive losses that have led some analysts to call on GM to close or sell off its European operations.

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Opel is just one of a number of European makers aiming to rein in excess capacity at a time when the Continental auto market has sunk to its lowest level in decades – Ford, for example, will shutter two British facilities and a larger plant in Belgium in 2014. But the closure of Bochum, where 3,000 are currently employed producing models like the Zafira van, would mark the first time a major auto plant has been shuttered in Germany since the end of World War II.


Union Pay Freeze Could Be Crucial for GM Europe

Workers trade wages for job guarantees.

by on Mar.01, 2013

GM is counting on new products like this Opel Adam -- and cost-cutting -- to help it reverse 13 years of European losses.

IG Metall, the powerful German metalworkers union, has agreed to a pay freeze for 20,000 union members employed by Adam AG Opel, General Motors’ principal European subsidiary. The move could be a critical next in the long-sought turnaround plan for GM which has suffered 13 years of worsening losses in Europe.

In exchange for the pay freeze, the automaker has agreed to hold off on layoffs and will continue operating a plant in Bochum, Germany that was slated to close permanently.

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German pay increases, put on hold in November as part of the negotiation process, will be postponed through 2015, the Ruesselsheim-based unit said in a statement today. GM will refrain from forced firings through 2016 as part of the deal, according to a statement posted on the German union’s web site.


Opel Will Close German Assembly Plant

Critical step in GM’s European turnaround plan.

by on Dec.10, 2012

Job cuts will be handled in a "socially responsible way," promises GM Vice Chairman Steve Girsky.

Despite resistance from unions and political leaders, General Motors will move ahead with plans to close an excess assembly plant in Germany, a move seen as critical to the maker’s long-awaited turnaround in the troubled European market.

The news could impact about 3,000 of GM’s 20,000 German employees – but the maker said it will handle the anticipated job cuts in a “socially responsible way.” The question still lingering is whether additional plant closings and job cuts will be necessary to right GM’s floundering Opel subsidiary.

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In a statement, the maker stressed that “The main reasons” for the closure of the Bochum assembly plant “are the dramatic declines in the European car market and the enormous overcapacity in the entire European auto industry.”


GM Europe Won’t Break Even Until Mid-Decade

Further plant closings possible.

by on Nov.01, 2012

GM Vice Chairman Steve Girsky leads a new team trying to right the maker's European ship.

Despite an intense turnaround effort that will include plant closings, job cuts, a management shake-up – and a flood of new product – General Motors doesn’t expect its hemorrhaging European operations to be back in the black until mid-decade, according to the executive overseeing that rescue effort.

In the near-term, losses are continuing to mount, $478 million for the third quarter, and the maker upping the projected deficit for all of 2012 to somewhere between $1.5 billion and $1.8 billion. GM Europe has consistently run in the red since 1999, total losses now expected to top $17 billion by year-end.

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But the picture isn’t entirely bleak. GM’s German-based Opel subsidiary has received strongly positive reviews – and a flurry of orders – for new products such as the compact Mokka crossover and Adam minicar, and GM Europe actually going into the black from a cashflow basis for the July – September quarter.

That was “a positive step in this difficult environment for a company that hasn’t had much positive news” in recent years, suggested Steve Girsky, the former Wall Street automotive analyst who now serves as GM Vice Chairman – and who was put in charge of the European turnaround early this year.


GM Set to Slash Opel White Collar Jobs

Desperate automaker looking for options.

by on Sep.13, 2012

Opel continues to struggle for a turnaround.

Adam Opel AG, the heart of General Motors European operations, is apparently preparing to take a meat ax to its administrative staff in Germany.

Opel, which is now under new management following the latest corporate shake-up, wants to cut 1,000 of 3,300 administration jobs at its Ruesselsheim, Germany, headquarters, according to Frankfurt Allgemeine Zeitung which cited two supervisory board members who didn’t want to be named.

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GM recently put its Vice Chairman Steve Girsky in charge of coming up with a turnaround plan for its European operations – hoping to stem losses that are expected to reach between $1.5 billion and $2 billion this year, the 13th consecutive annual loss for the subsidiary.


Shake-Up at Opel Continues

New CEO named as two more senior execs are ousted.

by on Jul.18, 2012

New Opel CEO Dr. Thomas Sedran.

General Motors is continuing a massive shake-up at its money-losing European operations as part of a broader turnaround plan.

The latest move puts board member Thomas Sedran in charge of Opel while two other executives with the German-based brand are being replaced.

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Sedran, who had been serving as the deputy chairman of the Opel board is a turnaround specialist who previously worked with Detroit’s AlixPartners a consulting firm that played a major role in GM’s 2009 bankruptcy. He also led the automotive competitive analysis operations for the Roland Berger consultancy.

With a PhD from Ludwig Maximilian University, Sedran replaces Karl-Friedrich Stracke as Opel’s CEO.  Stracke was yanked from that post after less than a year and will be handling “special assignments” for GM Chairman and Chief Executive Dan Akerson.


Overseas Operations Weakening, GM, Ford Heading for Big International Losses

Ford sees $500 million loss abroad, GM $1 billion in Europe.

by on Jun.29, 2012

Ford CEO Alan Mulally -- the maker now anticipates big losses overseas.

An economic meltdown in Europe, a slowdown in China, weakening currency and new trade barriers in South America. The situation is getting bad for the auto industry, and both General  Motors and Ford, in particular.

The smaller of the Detroit makers now anticipates overseas losses to reach $500 million for the second quarter, a heavy anchor on earnings from the recovering North American market.  GM, meanwhile, expects the red ink from its long-troubled European operations to reach around $1 billion.

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Noting its “operations outside of North America are under increasing pressure,” Ford warned in an SEC filing that “Our combined results for the second quarter for Ford South America, Ford Europe, and Ford Asia Pacific Africa could be a loss of about three times as much as the $190 million pretax loss incurred by these operations in the first quarter.”