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GM aims to cut its costs in Europe by more than half a billion euros in a drive to return to profits, the Financial Times Deutschland paper reported on Monday, citing an unidentified GM executive.

The report comes amid a disagreement between the company and labour unions over management plans to freeze pay in Europe.

“This is a not a question of heads (to be laid off), but rather a financial number, and this number will be higher than at DaimlerChrysler,” it quoted a GM manager as saying.

He was referring to a deal that DaimlerChrysler clinched in July that will save the company 500 million euros a year in labour costs from 2007 in return for job guarantees.