General Motors Corp forecast its European business will post a profit in 2011 at the earliest once it cuts $1.2 billion in costs that could mean plant closures and thousands of jobs lost. The ailing US automaker said late on Tuesday that it would also cap its financial support to Saab by the end of this year as it seeks a buyer interested in the loss-making Swedish brand "given the urgency of stemming sizeable outflows".
For its Germany-based Opel business, General Motors Europe said on Wednesday it would begin talks on a restructuring process with a view to avoiding layoffs and plant closures, and was prepared to consider expressions of interest from third-party investors.
Sweden's government ruled out owning carmakers or their factories while lashing out at GM, accusing it of shirking its responsibility as an owner and alleging talks over state aid for Saab lacked a realistic basis.
"We don't know how much money GM is prepared to put into Saab. They've said they are going to do this for a year, but in order to keep operating it (Saab) for a year they need 8 to 10 billion (crowns) and they want us to provide 5 billion (crowns, $573.9 million) of that," Swedish Industry Minister Maud Olofsson said. With speculation continuing about how many of the planned 26,000 job cuts outside the US would be carried out in high-wage western Europe, where roughly 50,000 GM workers are employed, outrage erupted among its labour staff.
"Opel makes a profit and we had a profit last year as well. Nobody on the outside knows that, they just always think that since the parent is falling apart that Opel is also bloody rubbish," said Francisco Jimenez, an Opel worker and IG Metall union functionary in Ruesselsheim, Germany.
European Opel dealers were keen to participate in a solution for the GM brand, potentially encompassing taking an equity stake in Opel. GM, which is seeking an additional $16.6 billion from Washington after already getting $17.4 billion in loans, is in talks with European labour representatives over the $1.2 billion in cost cuts which could include "several possible closures or spin-offs of manufacturing facilities in high cost locations".