GM Europe Continues To Struggle Toward Profitability
May 03 2012 - 11:37AM
Dow Jones News
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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