GM senior management acknowledges possibility of a smaller, leaner organisation

04 March 2009

General Motors' struggling European operations will run out of sufficient money to operate in the second quarter of this year unless governments across Europe provide aid, GM President Fritz Henderson said at the Geneva auto show yesterday.

To avoid that immediate and disastrous shutdown, GM will set its European operations up as an entity in which third parties will hold a considerable stock interest, perhaps more than 50 per cent, he said.

After Swedish carmaker Saab seperated from GM, Opel is now due to become independent from the troubled US auto giant under a restructuring plans. The move will also see Vauxhall, which represents General Motors in the UK, rolled into the newly restructured company and spun off from its US parent.

Last week, following weeks of speculation about Opel's fate,  Forster told a news conference the German carmaker would be split off into a separate unit to be majority owned by its struggling US parent (See: Opel set to break away from GM, Vauxhall also part of the deal)

''It's important that GM Europe stays within General Motors,'' Henderson said, adding that he was ''not in a position to foreclose'' any option, including European governments owning more than half of the new business.

GM is seeking 3.3 billion in euros or about $4.125 billion from the European countries. GM's plan will still allow the company to use its global resources to develop powertrains and vehicle architectures that will be produced and sold around the world, Henderson said.