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GM warns of restructuring in Europe

Latest update : 2009-02-16

After trimming hundreds of jobs in the United States and elsewhere, US car giant General Motors has announced it plans "aggressive steps" to cut costs in Europe as a deadline looms to submit its recovery plan to the US Treasury.

AFP - General Motors said it could take "unconventional and aggressive steps" to cut costs in Europe, as a deadline loomed this week for the ailing automaker to present its recovery plan to the US government.

"GM will not comment on speculations about possible plant closures," said the carmaker in a statement obtained by AFP.

But GM, which had obtained an emergency loan of 9.4 billion dollars (7.4 billion euros) from the US government, added that its Europe unit was "seeking to reduce annual structural cost" in order to cope with the severe economic downturn battering Europe.

"The economic crisis and its severe impact in consumer confidence and purchase behavior will require GME (GM Europe) to take further restructuring measures, while trying to preserve as many jobs as possible," it added.

The group said that it told European employees last Thursday that the management could take "unconventional and aggressive steps to reduce the structural costs in Europe."

According to trade press Automotive News Europe, three factories most at risk of closure by the car-maker are Antwerp in Belgium, Ellesmere Port in Britain and at least one plant in Germany.

GM has until Tuesday to present preliminary plans to the Treasury Department outlining its steps to reduce costs and plan for the future.

The final plan that will serve as a basis for the Treasury's decision to call in or extend the loan that is due by March 31.

The company was brought to the brink of bankruptcy last year as auto sales collapsed amid a credit crunch and widening recession.

GM has already slashed more than one million units of capacity over the past year and could cut more.

The company has also announced plans to eliminate the jobs of an additional 3,400 of its 29,000 salaried employees worldwide and to offer early retirement packages to all its 62,000 hourly US workers.

Date created : 2009-02-16

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