It may take "a while" before Opel, the German unit of General Motors, turns a profit, according to GM CEO Dan Akerson. He also said that he would not rule out shutting down plants as he restructures the money-losing subsidiary. He describes the automaker's operations in Europe as a "four-alarm fire." When asked whether he would have to close factories, Akerson declined to make a comment.
He revealed that negotiations with the labor union are ongoing. However, he stated that Opel will not recover until production or capacity and diminishing demand are balanced. Akerson added that unless a strong export model in the European region is available, "you're not making money."
He did not provide specific timeframe as to when Opel is expected to return to profit. In 2011, Opel and its UK-based sibling company Vauxhall abandoned plans to breakeven. The unit incurred an operating loss of $747 million at the end of 2011. Since the late 1990s, GM has lost at least $13 billion in the European region. Media reports stated that the GM's facilities at Ellesmere Port in England and Bochum in Germany are under threat of closure.
Last month, the sales of Opel/Vauxhall dropped 11% to 111,285 in the 27-member EU states plus Norway, Iceland and Switzerland in a total market down 6.6% -- a 14-year monthly low.
GM is set to announce the details of an Opel plan in the summer, Akerson told Financial Times on the sidelines at the Beijing motor show. The paper further cited the CEO as saying that they "hope" to discuss "more specifically" within the next months on the details of the plan going forward. [source: Autonews]