General Motors lose millions in Europe

20/02/2012

The future of the UK car manufacturing industry could hang in the balance as the General Motors (GM) group announced pre-tax losses of £447 million in the European market.

The news may mean that the motoring group, which includes brands such as Vauxhall, may be forced to make cuts in their Cheshire and Luton factories.

Over 2,000 people make the Astra model at the Cheshire base, with a further 1,200 building commercial vehicles in Luton.

Reports that GM is planning to close the Vauxhall plant at Ellesmere Port, Merseyside, subsequently affecting 2,000 employees were dismissed as mere 'speculation'.

However, GM has previously made 9,000 job cuts and closed a plant in Antwerp, Belgium, after a failed sale of its European division to Canadian car parts group Magna in 2009.

Commenting on the grim figures, the group’s Chief Financial Officer Dan Ammann argued that GM were doing all in their power to redress the European situation;

"Behind the scenes we are working hard to eliminate complexity and cost throughout and to increase margins in all of our regions and Return Europe and South America to profitability."

However, today's announcement that the GM group made $7.6 billion in net income in 2011 may help to prop up the ailing European sector. This figure has also seen a dramatic increase since 2010 when it stood at $4.7 billion.

Revenue also soared by 11% to hit $150.3 billion, compared to $135.6 billion in 2010.

These figures are a far cry from GM's position two years ago, when the motoring group faced potential bankruptcy.

The healthy picture for GM's net income will also have a bearing on the European market, according to Dan;Akerson, the group's chairman and CEO;

"In our first full year as a public company, we grew the top and bottom lines, advanced our global market share and made strategic investments in our brands around the world.

"We will build on these results as we bring more new cars, crossovers and trucks to market, and make GM a far more efficient global team. This includes reducing our break-even level in Europe and South America and driving higher revenues around the world."

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