ZURICH/DETROIT -- Michael Burns is not ready to say that General Motors Europe has turned the corner. But, having just announced a net loss of $286 million (E229 million) for 2003, the president of GME is confident that the company will break even or make a small profit in 2004.
"The goal is to become profitable, between zero and 100 million dollars," Burns said. "We have less cost, more product and better quality."
Burns added, that currency uncertainty and the pace of growth in the European market add up to "a lot of unknowns."
The appreciation of the euro against the dollar and the strength of both the Swedish krona and the pound cost GME roughly $300 million in 2003. Coupled with a restructuring charge the company took in the fourth quarter, exchange rates were key factors in the company's 2003 loss. Net losses narrowed for the year from $549 million in 2002.
"We did better than most [of our rivals], but we still did not make money. So we are not happy," Burns said
GME boosted car production by 30,000 to 1.8 million vehicles in 2003 and it expects to continue to pick up market share. But Burns doesn't expect miracles and said that increases of a few-tenths of a point are welcome in today's "really tough" market. GME boosted its share of the European market to 9.4 percent in the fourth quarter of 2003 from 9.2 percent a year earlier.
GME's hopes are fueled by the introduction of the new Opel Astra, a full year of sales of the Opel Vectra wagon, and increased sales of the more expensive Opel Meriva diesel.
Net profit for the GM group was flat at $1.0 billion in the fourth quarter, despite a 1.2 billion net gain from the split-off of Hughes Electronics. Global automotive operations posted a 31 percent drop in fourth-quarter net profit to $396 million, mostly due to lower income in North America and higher losses in Latin America.