Speaking at a recent Detroit Economic Club forum, General Motors Chairman and CEO, Dan Akerson told reporters that while GM is performing admirably in the U.S., the mounting European debt crisis is forcing the Detroit automaker to rethink its strategy in the Old Continent.
However, Akerson did not elaborate on what GM plans to do about the group’s two European brands, Opel/Vauxhal and Chevrolet.
“We’re doing better in Europe”, said Akerson. “It’s just that there are real clouds there on the horizon.” This has led GM, which suffered a US$292 million loss in the third quarter alone in Europe, to reverse its initial projection of breaking even by the end of 2011.
Akerson said that while business has improved over the past years, GM’s performance in European markets has not meet initial expectations. “Clearly, you can’t have a unit as important as Opel is to General Motors Co. chronically unprofitable.”
He added that GM’s plants in Europe are running only at 80% capacity, whereas they should be running at full capacity. That’s because the economic crisis has severely affected demand throughout the continent.
What does Akerson think is the remedy? He didn’t say, but he did note that some of GM’s rivals are already making severe cuts which could spell trouble for the firm’s European divisions.
Story References: Detnews
