GM Europe president, Carl-Peter Forster, has outlined plans for improving productivity and profitability by increasing outsourcing and producing more locally.
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According to Automobilwoche, Forster said that GM’s plans for a major restructuring in North America would not be brought across to Europe. But he does have to address profitability. GM Europe (GME) full year 2007 earnings before tax were $55m (reported loss of $524m), down significantly from earnings before tax of $357m in 2006, excluding special items (reported loss of $297m).
One solution could be to produce more in the booming Russian market. “In addition to 25% import tax we also have logistics costs, which means that we must at least build our high volume Astra and Antara models locally,” said Forster. He said that GM Europe could sell 300,000 cars a year in Russia.
Automobilwoche said that GM is currently negotiating with works councils to increase outsourcing as a route to improving profitability.
