GM Europe's head Carl-Peter Forster has told his staff that GM's European operations must aggressively cut costs further in order to survive.

"In order to survive, there is no alternative to aggressively reducing our cost structure," Forster said in a letter sent to staff.

The goal was to lower labour costs "by at least 10 percent" through cuts in "salary costs ... (and) reductions in working hours," Forster said.

He excluded outright job cuts "for the moment" but warned other measures would have to be taken if automobile markets continued to deteriorate.

"I must also warn that if European markets deteriorate further, it is very likely that other steps will be needed to in order to survive," the GM Europe chief said in the letter.

Earlier this month, writing in his corporate blog, Forster outlined the immediate problems of the external environment and what he sees as GM Europe's necessary response:

"We are in a pan-economic global crisis driven by the lack of credit/liquidity at all levels of the market. I've spoken to business leaders both inside and outside our industry and GM is certainly not the only company under intense pressure. We have to act aggressively and we are doing so already. Part of our strategy to deal with these headwinds is to continue to improve revenue and productivity and to get the cost base of the operation in line with market demand. Clearly, we have much to do in this area over the next several months."

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