GM sees end to European losses by 2015
Automaker's Q3 profit down 14%, hurt by weak Europe
DETROIT -- General Motors Co. said it was targeting a return to break-even levels in its European operations by 2015 as the automaker reported that third-quarter net profit slid 14 percent, hurt by wider losses in Europe, higher costs in North America and a less-profitable mix of sales in several markets.
The automaker's net income was $1.48 billion for the July-September period, down from $1.73 billion a year earlier, the company said on Wednesday. Revenue rose 2 percent to $37.58 billion.
Losses in Europe widened to $478 million from $292 million a year earlier, as GM continued to struggle with a glut of capacity and plunging demand amid the continent's recession and debt crisis.
GM said it expected a full-year operating loss of $1.5 billion to $1.8 billion in Europe, depending on the level of restructuring in the fourth quarter. Last year, the automaker lost $747 million in the region.
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.
GM expects industry auto sales in Europe to fall 4 percent to 5 percent in 2013 from 2012, when sales were the weakest in nearly two decades.
Steve Girsky, GM's Europe chief, said on a conference call on Wednesday that the company is not banking on market share gains of its Opel and Vauxhall brands to financially succeed.
Girsky also said that GM was cash-flow positive in the third quarter in Europe.
GM CFO Dan Amman said the automaker still sees the European economy as flat to slightly deteriorating. "We're not banking on a sharp turnaround at this point," Amman said.
GM has now lost more than $17 billion in Europe since 1999.
GM's global profits before interest and taxes, and excluding any one-time items, were $2.3 billion, up 5 percent from a year earlier.
Profit in the company's international division -- which includes China, Korea, Australia and several emerging markets in Asia -- jumped 89 percent to $689 million, on stronger prices and higher production volume. Results were especially strong at GM's Holden unit in Australia and GM Korea.
In South America, GM swung to a $114 million profit before interest and taxes, reversing a $44 million year-earlier loss. CFO Ammann said he expects South American results to strengthen in coming quarters from a spate of new vehicle launches there.
GM Financial's profit before interest and taxes rose 12 percent to $200 million.
Reuters and Bloomberg contributed to this report