GM (GM) is Getting Furious with Opel, Aims for More Cuts
Up)
General Motors (NYSE: GM) may shift its favorite gemstone from an "Opel" to... just about anything else. Maybe a jade, or even lapis lazuli, should the situation call for it.
According to a WSJ report late Tuesday, GM's patience for its money-losing Opel unit in Europe is running thin as the branch is expected to report another dire quarter. Following cuts two years ago during the fallout of the financial meltdown, sources believe GM will soon begin making more cuts.
GM's Opel/Vauxhall brands have lost the automaker about $14 billion since 1999 -- not a number that screams "valuable brand." It's said GM might be looking to trim the fat by 5,200 workers at the Bochum, Germany and Ellesmere Port, England plants, though details are still sparse.
But GM can't just cry "off with their heads," because that would be a breach of contract.
Wednesday morning, brass at GM's European Opel/Vauxhall brands didn't see any signs of GM looking to breach the labor deal. The brands issued a statement, saying GM's intentions were purely "speculative."
Maybe Opel/Vauxhall officials should have read this quote, made by an unnamed GM official: "There is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough...If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep."
Time to dust off the resumes, boys.
Other alternatives might be a reduction of materials costs, reduced waste within the company, and/or renegotiated contracts with suppliers for better pricing.
Ahead of the bell, GM shares are up about 0.1 percent.
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According to a WSJ report late Tuesday, GM's patience for its money-losing Opel unit in Europe is running thin as the branch is expected to report another dire quarter. Following cuts two years ago during the fallout of the financial meltdown, sources believe GM will soon begin making more cuts.
GM's Opel/Vauxhall brands have lost the automaker about $14 billion since 1999 -- not a number that screams "valuable brand." It's said GM might be looking to trim the fat by 5,200 workers at the Bochum, Germany and Ellesmere Port, England plants, though details are still sparse.
But GM can't just cry "off with their heads," because that would be a breach of contract.
Wednesday morning, brass at GM's European Opel/Vauxhall brands didn't see any signs of GM looking to breach the labor deal. The brands issued a statement, saying GM's intentions were purely "speculative."
Maybe Opel/Vauxhall officials should have read this quote, made by an unnamed GM official: "There is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough...If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep."
Time to dust off the resumes, boys.
Other alternatives might be a reduction of materials costs, reduced waste within the company, and/or renegotiated contracts with suppliers for better pricing.
Ahead of the bell, GM shares are up about 0.1 percent.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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