General Motors is combining Saab's independent product development and manufacturing operations with Opel's, effectively creating a single European organisation for the two GM brands, Automotive News reported.

The motor industry newspaper said the new structure has grown out of Saab's emergency turnaround strategy, called Viggen.

"There will be much more cooperation and the two organisations will grow together," Opel chairman Carl-Peter Forster told Automotive News. "Is it one organisation? Things aren't that black and white. There will always be shades of grey. But the direction is clear," he reportedly added.

Automotive News said that both Saab and Opel are deep into financial turnaround strategies - Opel's Project Olympia, launched in mid-2001, is aimed at restoring profits later this year while Saab's Viggen plan, which was implemented last autumn, is modeled on Olympia.

The newspaper said that Saab would eliminate about 1,300 jobs - 14% of its work force - after suffering a $US132 million [125.5 million euros] loss in the first half of 2002 and that combining Saab's autonomous engineering and production organisations with GM Europe's would help bring down costs at the Swedish subsidiary, which sold just 120,000 cars last year.

"We will see a tremendous amount of collaboration," Forster told Automotive News.

The newspaper said that GM Europe engineering boss Hans Demant had added responsibility for Saab while GM Europe production chief Timothy Lee now oversees Saab manufacturing operations as well as Opel's and Vauxhall's.

Automotive News noted that GM chairman Jack Smith said in an interview in Detroit last week that GM Europe would eventually be structured similar to General Motors in North America.

In North America, GM has over the past decade combined division engineering staffs into a single corporate engineering staff, Automotive News said.

Separately, according to Reuters, GM chief executive Rick Wagoner told Swedish daily Dagens Nyheter that Saab should focus on growth in the United States and expand its product portfolio, said on Saturday.

"The best way to get Saab big and profitable is to grow in the US," Wagoner reportedly said in an interview in Detroit. "Fast growth in the United States has the highest priority. I am not saying that this would happen at the cost of Europe, but the focus must be here."

According to Reuters, Wagoner said the 9-3 model had been received very well but the firm needed more products, and quickly.

Reuters noted that the paper said Wagoner implied that some of the forthcoming Saab models could be produced in the United States.

"We can not have all of our eggs in the same basket [when it] comes to a European cost structure and American dollar-based sales," Wagoner reportedly said, referring to the drastic impact of a weakening dollar on Saab's profits.