GM Europe Continues To Struggle Toward Profitability

Date : 05/03/2012 @ 11:37AM
Source : Dow Jones News
Stock : General Motors Company (GM)
Quote : 35.17  -1.18 (-3.25%) @ 7:27PM
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GM Europe Continues To Struggle Toward Profitability

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GM Europe continues to struggle to reach profitability, saying Thursday it wasn't satisfied with first-quarter results, but saw a better market situation in March.

"Although the results do not satisfy me at all, there are many signs of progress," the head of GM Europe, Karl-Friedrich Stracke, said in a letter to employees.

Parent company General Motors Co. (GM) has struggled with losses at its European operations for years, racking up about $700 million in losses in the region in 2011 alone. In 2009, GM was close to unloading Germany-based Opel, only to decide to restructure it instead.

It has yet to pay off. Earlier Thursday, GM reported that GM Europe had a first-quarter loss before interest and taxes of $256 million compared with a $5 million profit a year earlier. GM's first-quarter profit fell 69% to $1 billion.

GM Europe attributed the loss to a weak European auto market, as well as poor sales figures for Opel and Vauxhall for January and February.

"Against the background of a difficult economic situation, our loss won't surprise anyone," Stracke said. "Luckily the situation in March looks better." He added that sales in the month were good.

He said the situation is also difficult for other volume car makers in Europe, adding that Opel surpassed its targets for cost cuts in raw materials in the first quarter.

-Frankfurt Bureau, Dow Jones Newswires, +49 69 29 725 500

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