GM to stick to Opel cuts plan: future chairman

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Dimanche 22 nov 2009 | 00:31:31

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GM to stick to Opel cuts plan: future chairman

ZURICH (Reuters) - General Motors Co will probably stick to a plan to cut costs at Opel by 30 percent after deciding to restructure the European subsidiary itself rather than sell it, Bob Lutz, a GM executive set to become Opel's chairman, was quoted as saying on Sunday.

"The restructuring plan developed at the end of last year is still the basis for a profitable business model. The plan foresees a 30 percent cut in structural costs," Lutz told the Swiss Sonntag newspaper.

"We will now analyze the current situation carefully and propose relevant measures. We don't expect any fundamental differences to the models discussed so far."

GM left leaders in Berlin and Moscow seething last week when it dropped plans to sell a 55 percent stake in Opel to Magna and its Russian partner Sberbank.

GM will instead restructure Opel itself in a 3 billion-euro revamp it wants countries with Opel plants to help finance. The goal is to cut fixed costs at Opel by 30 percent -- in part by chopping a fifth of Opel's 50,000 staff.

Lutz said the main reason GM had decided not to sell a stake in Opel was because GM's business position had improved and there were also brighter signs in the European economic climate.

"We are all rather optimistic at the moment and see small signs of a mild recovery. There could be a slight recovery toward the end of the year, which would hopefully continue in 2010 and 2011," he said.

(Reporting by Emma Thomasson; Editing by Greg Mahlich)