GM Europe increases the pressure on Opel

Forster: "We need to be in motion"

Paris. GM Europe Chairman Fritz Henderson has abandoned his goal of making at least a $100 million profit in the 2004 business year.

He said that the third quarter was bad (precise figures will be announced on October 14) and that neither a recovery of the European auto market nor an end to the new car pricing battle is in sight.

Henderson said in an interview with Automobilwoche that as a result of all this, General Motors will lose money in Europe for the fifth consecutive year.

He called the situation "totally unacceptable" and said that the company's biggest problems are overcapacity and low productivity at several plants.

GME President Carl-Peter Forster told Automobilwoche that the Ruesselsheim plant's productivity is still 35 percent lower than that of the most productive plant in Europe, despite the progress made with the Olympia restructuring program.

Forster said: "If we manufactured the Vectra in Eisenach instead of Ruesselsheim it would cost us only half as much."

He said that the group could no longer afford the combination of "low productivity and high wage costs" in Germany.

"We need to be in motion," the former Opel boss told the representatives of the works council, with whom further austerity measures are being discussed.

During the negotiations Forster contradicted Klaus Franz, the head of the works council ,who said that plant closures in Europe and layoffs are out of the question because of the European outline agreement. He said, "Franz should know better."

Forster said that plant closures are not idle threats. And if there is no other way then layoffs will occur.

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