GM Europe Struggling; Cuts 5k Production Jobs

Robert Farago
by Robert Farago
gm europe struggling cuts 5k production jobs

If you were laboring under the impression that GM's European division was in the pink– after racking-up $4b in losses between 2000 to 2006– forgeddaboutit. [NB: freshly-minted GM COO Fritz Henderson was Chairman of GM Europe from 2004 to 2006.] Reuters reports that the Euro-turnaround has stalled– with an entirely predictable response. General Motors Europe is cutting 5k manufacturing jobs– about a tenth of its European workforce– as "the top U.S. car maker aims to stem steep losses in declining main auto markets." And if you think the United Auto Workers are tough (i.e. expensive to bribe), check out the European works council's response. "We want guarantees that there will be no plant closures in west Europe until at least 2020," Jean-Marc Ruhland demanded. And if that sounds familiar, so should the excuses. GM's Euro Prez Carl-Peter Forster said his employer's low profitability was "not confined to Opel but was an industry-wide problem among volume carmakers in Europe due to price pressure as Asian manufacturers exported cheap cars to the continent." America's tanking, Europe's struggling. Can the rest of the world buoy the corporate mothership? If so, for how long?

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  • Joeaverage Joeaverage on Mar 13, 2008

    Unions are demanding everywhere...

  • Detroit1701 Detroit1701 on Mar 13, 2008

    It's not Opel/Saab's fault, necessarily. It is an extremely competitive market, with about 15 other car companies (Renault, Peugeot, Citroen, VW, BMW, Audi, Mercedes, Fiat, Alfa, Volvo, Honda, Toyota, Hyundai, Ford, Nissan -- some which are partnered up with each other) that offer similar vehicle lineups. Profit margins are razor-thin, there is alot of nationalistic car purchases (Germans buy German, French buy French, British buy Fords (?)), high labor costs, high fuel prices, race to the top in expensive diesel/hybrid R&D, bizarro European emission and safety regs, etc.. I am not so sure about the Asian complaint, however. Europe has pretty strict anti-dumping laws and reasonably high import tariffs. Does anyone know if there is truth to this? No wonder all of those companies make their money in North America (and now China and the Middle East) on their high-end, highly profitable vehicles (see Audi).

  • Jeff Puthuff Jeff Puthuff on Mar 13, 2008

    India and China are their last hopes. TTAC needs agents in those countries to report, stat.