CEO

GM CEO says European car business is not for sale

AP News
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Posted: Jul 27, 2011 3:46 PM
GM CEO says European car business is not for sale

General Motors' CEO says the company's European car business is not for sale.

Media outlets have reported that GM wanted to sell the struggling operations, which include the Opel and Vauxhall brands.

"Opel is not for sale," CEO Daniel Akerson told reporters Wednesday in Detroit, referring to GM Europe's biggest brand.

GM Europe is a money-loser for GM, but it's an important center of engineering and design. When former CEO Fritz Henderson tried to sell the business shortly after GM's 2009 bankruptcy, he was overruled by the board because several of GM's small and midsize cars are based on underpinnings designed by Opel.

Yet high labor costs, restructuring expenses and sagging European sales caused a $1.8 billion loss for GM Europe last year. GM, however, has made progress lowering costs lately.

Reports in Germany's Spiegel and Auto Bild publications have said that GM Europe could be sold to a Chinese firm or Volkswagen AG. GM has called the reports speculation, but has not said definitively that the business is off the sales block.

At the company's annual shareholders meeting in June, Akerson repeatedly touted progress in Europe over the past two years.

"It's not just an abyss that we were looking into 18 to 24 months ago," he said.

The European business employs 40,000 people.