GM renews commitment to loss-making European brand Opel
RUESSELSHEIM, Germany (Reuters) - General Motors (GM.N: Quote) renewed a commitment to its loss-making European brand on Wednesday, pledging to invest 4 billion euros ($5.2 billion) in Opel by the end of 2016 to support new model launches.
GM is aiming for a slight improvement in its European business this year, but not enough to avoid a 14th straight annual loss as car sales on the continent plunge to their lowest in almost two decades.
Speculation has persisted that GM might shift Opel's assets off its balance sheet into a joint venture with struggling French ally PSA Peugeot Citroen (PEUP.PA: Quote), or even sell Opel entirely.
"As a global automotive company, GM needs a strong presence in Europe - both in design and development as in manufacturing and sales," GM Chief Executive Dan Akerson told reporters at Opel's headquarters in Ruesselsheim.
"Opel is key to our success and enjoys the full support of its parent company," he added.
When asked specifically whether the 4 billion euro investment pledge guaranteed that Opel would remain a fully-owned unit of GM through 2016, Akerson declined to comment.
But his top lieutenant, Opel Chairman Steve Girsky, told Reuters that speculation of a disposal was unfounded.
GM's board met in Ruesselsheim to examine progress in the brand's turnaround plan dubbed "DRIVE!2022" and the difficulties faced by Europe's auto industry.
The company's adjusted operating loss in Europe widened to $1.8 billion last year from $700 million in 2011 and it only expects to achieve profitability in the middle of the decade. Continued...