General Motors faces pressure to reduce Opel production, workforce

Article by Anita Panait, on February 16, 2012

Dan Akerson, chief executive of General Motors Co., is under intense pressure to balance the company’s record profits with the losses that its European operations continue to incur. For the first three quarters of the 2011 fiscal year, the company has recorded profits more than any year since around 1987. 

But its fourth quarter results could be deeply affected by Akerson’s decision to keep the company’s Opel unit, which is the biggest contributor to GM Europe’s S14.7 billion in operating losses since 1999. Analysts expect GM to post a quarterly profit lowest since it emerged from bankruptcy in 2009.

With that in mind, Akerson might be forced to implement production and job cuts at Opel just to keep GM posting profits. GM is expected to reveal in its fourth quarter report the depth of pension shortages and the continued worsening of sales in South America, where low-cost imports are posing a great threat to market leaders.

Itay Michaeli, an analyst at Citigroup Inc., said that what investors are “afraid” of is that restructuring would become more difficult due to the negative reports about Opel. He said that investors are worried about the damage to market share and sales.

He added that the investors’ patience for the brand to achieve a credible plan to break even is “slowly wearing thin.” In the first three quarters of 2011, GM managed to grab more market share in the US and it was able to wrestle back its crown as the largest automaker in the world.

If you liked the article, share on:

Topics: gm, opel, production

Comments

Recommended

Lamborghini had been expected to refresh its entry-level model – the Lamborghini Huracan – in late 2018 or early 2019. But here is some good news for fans of the...
by - November 20, 2017
The Chevrolet Corvette will be turning 65 years old in 2018, and as part of the celebrations, the brand is introducing a special edition C7 – the Chevrolet Corvette Carbon...
by - November 19, 2017
Tesla revealed that with its new Semi, truck drivers can expect better experience especially with heightened safety and the lower cost of transporting cargo. Indeed, the cabin of the new...
by - November 19, 2017
November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 2017
More details have emerged about the new sixth generation of the BMW M3 just as the German premium practically announced the end of the current-gen 3 Series with the unveiling...
by - November 17, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries