GM's Job Cuts in Europe to Total 2,600 in 2012

General Motors Co. (IW 500/4) announced plans to cut thousands of jobs in Europe after losses there contributed to a 12% drop in third-quarter profits.

Europe has long been a drag on GM's bottom line, but the automaker said it is well on the path to achieving long-term profitability there despite expectations that regional demand will not rebound from current depressed levels for quite some time.

GM said it will have eliminated 2,600 jobs in Europe by year's end through natural attrition and buyouts as it works to reduce fixed costs and slash production.

"We will continue to drive further headcount reductions in the future in line with demand," GM Vice Chairman and European turnaround leader Steve Girsky said in a conference call.

The automaker also plans to eliminate a third shift in its Eisenach, Germany, plant in the first half of next year, has no plans for future production at its Bochum plant once Zafira ends its run and said the future of its Strasbourg plant is "under review."

Asked if that review could entail a possible sale of the Strasbourg plant, a spokesman told AFP that "GM is now in discussions with an interested party on the potential of such a transaction."

GM's fixed costs in Europe are expected to be down $300 million this year compared with 2011 -- in part due to headcount reductions and more flexible labor contracts -- and Girsky said it plans to slash another $500 million in fixed costs through 2015.

"Despite the terrible economic environment in Europe, we're not sitting still. There are some green shoots springing at Opel despite the mud," Girsky said. He noted that Opel has gained market share in nine countries and said GM will introduce 23 new products in Europe by 2016.