GM cuts 2,600 jobs in Europe
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MUNICH -- General Motors Co. said it will cut 2,600 jobs in Europe by the end of the year as part of a plan to reduce losses at its Opel/Vauxhall unit.
GM has already eliminated 2,300 of the positions through early retirement and voluntary severance packages, GM Europe said in a statement on Wednesday.
The automaker also plans to cut $500 million in costs in Europe between 2013 and 2015. This year, GM Europe's fixed costs are expected to be down by about $300 million, the statement said.
GM said it had reduced company and dealer-owned inventory in Europe by 100,000 units since February and an additional 20,000 reduction is planned by the end of the year.
GM is also planning to shutter its plant in Bochum, Germany, in 2016 to trim overcapacity problems. The company reiterated on Wednesday that there is no allocation of future product planned for Bochum after run-out of the current Opel Zafira minivan.
GM said it expects to lose between $1.5 billion to $1.8 billion this year in Europe after its third-quarter losses in the region widened to $478 million from $292 million a year earlier.
The company said it was targeting results in Europe to be slightly better in 2013 than in 2012 and to reach break-even by mid-decade. "Achieving break-even results will be a significant milestone in GME's long-term 'Drive Opel 2022' plan," said Steve Girsky, GM Vice Chairman and the company's Europe chief, in the statement.
GM Europe aims to become profitable by earning higher revenue from its vehicles currently on sale or due to launch and by significantly reducing breakeven level, he said.
The company's strategy includes refocusing Opel's marketing strategy, improve the brand's image, strengthening the quality of market share and launching new models such as the Adam minicar, Cascade convertible and Mokka subcompact crossover, the compnay's statement said.
"We have an aggressive, multi-billion dollar product plan that will deliver 23 new models and 13 new engines through 2016," Girsky said. "Many of Opel/Vauxhall's near-term launches are in entirely new segments, including the Mokka and Adam this year, and the Cascada next year."
Opel's image has "deteriorated" over the last several years, Girsky said. "We know we're behind here, and we're working very hard to bring us back to where we were."
GM Europe had positive cash flow in the third quarter, although some of that was due to inventory reductions, he said.
Bloomberg and Reuters contributed to this report
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