General Motors will cut thousands of jobs in Europe and reduce capacity at its Opel and Vauxhall plants in an effort to save at least $1.8 billion and return to profit on the continent by 2003, the head of its German unit said today.
"GM is considering closing one of its 13 European assembly plants or spreading the 15 per cent production cut over several sites," Opel AG chief executive Mr Carl-Peter Forster said, outlining a turnaround plan.
Other cuts in the 75,000-strong work force could come among office and sales staff. Peripheral operations, such as component factories, may be sold or offered for joint ventures with specialist suppliers, he said.
"We were in a downward spiral that had to be broken," Mr Forster told a news conference. He said GM's European operation, which includes Britain's Vauxhall, also needs to "extend and sharpen" its vehicle range.
Dubbed "Project Olympia", the restructuring plan is intended to return Opel and GM Europe as a whole to profit. The German unit accounted for more than half of GM's European sales of $25.4 billion last year and employs about a third of its work force.
Mr Forster's predecessor, Mr Robert Hendry, resigned in January after Opel booked a record loss of $460 million in 2000.
In Germany, Opel's market share has dwindled to 12 per cent, down from 17 per cent in the mid-1990s.
As part of the restructuring plan, Forster said Opel would close up to 30 per cent of its 2,000 dealerships in Germany.
Opel will also review its sponsorship of Germany's top soccer team, Bayern Munich, he said.
In Germany, Opel's market share has dwindled to 12 per cent, down from 17 per cent in the mid-1990s.
As part of the restructuring plan, Forster said Opel would close up to 30 pe rcent of its 2,000 dealerships in Germany.
Opel will also review its sponsorship of Germany's top soccer team, Bayern Munich, he said.