GM CFO – Too Early To Predict European Market Stabilization

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Most recently, a co-official of the leading American based General Motors said that presently it is not very comprehensible whether the fragile automotive market of Europe is still on its way to reach stabilization, or it has already reached stabilization level, but most of the top executives involved in the present business have now started discussing increasingly about decreasing overall production capacity so as to precisely match minor demand in this particular zone, and avoid potential losses in the process.

The company’s Open subdivision operating in the European market has lost almost $16-billion in the last twelve-years, which has provoked the United States carmaker to rush to conduct some necessary modifications to its business. Among the major change is the dismissal of the brand’s Chief Executive, and decreasing the total number of contract and temporary workers, and reducing the total working hours at certain production plants.

But, the fall in the overall product sales in the industry triggered by the Euro region recent debt disaster has only created increased stress on GM. Recently, at a conference held at Morgan Stanley, Dan Ammann, Chief Financial Officer at GM said that the problems in the European market are not just confined to GM’s business in the nation, but the crisis troubles the entire Euro automotive business. Ammann added that it was too early to decide whether the auto market in this part of the word has stabilized or not. It could even become worse depending on the level of debt crisis in the region.

Adam Jonas, a leading analyst at Morgan Stanley, recently released a research report in which he has clearly mentioned that it is time for General Motors to cut down its affiliations with Open Motors; however, the American automaker told that it has absolutely no ideas of doing that. Ammann also mentioned that the automotive industry representatives in the region are now discussing more on the need to decrease the overall capacity so as to match the inferior demand among the local customers. He added that since most of the carmakers have tied for relatively longer life cycles of the associated product, closing down production plants might take some more time.

In spite of the past and also recent struggles of General Motors in Europe, Ammann informed that the American carmaker stays determined to release many new products, referring to the vital debuts in the later months of this year, including small Opel Mokka Sports Utility Vehicle, and Adam Minicar.

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