Vauxhall eases GM's European difficulties

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The Independent Online
GENERAL MOTORS' profits in Europe fell by half to dollars 600m last year, largely because of heavy losses at its German subsidiary Opel, where job cuts, short-time working and a collapsing market took their toll.

The giant US car company, the biggest in the world, was only saved from an even steeper drop in earnings by a strong profit performance from its British subsidiary, Vauxhall.

Last year redundancies and production cuts forced GM to make restructuring provisions of dollars 800m, nearly half of which related to Opel.

The German division made a 'significant loss' after setting aside DM600m (pounds 235m) to cover 5,000 early retirements, short-time working and payments into a special reserve fund.

Despite the German setback, GM said it had maintained its position as Europe's most profitable car maker for the fourth year running, with a market share of 12.7 per cent and sales of 1.43 million in an overall market that declined by 16.3 per cent to 11.3 million.

Louis Hughes, president of GM Europe, said he expected little improvement in the western European car market this year, with sales forecast to rise by just 100,000 to 11.4 million.

'Too many economies remain weak, unemployment is too high and there is too much uncertainty among consumers concerning major purchases such as automobiles,' he added.

Total GM employment in Europe fell by 6,600 to 84,900 last year and there will be more job losses this year although not on the level of 1993.

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