GM will stick with plan to cut Opel costs

City A.M. Reporter
General Motors (GM) will probably stick to a plan to cut costs at Opel by 30 percent after deciding to restructure the European subsidiary itself rather than sell it, Bob Lutz, a GM&nbsp; executive set to become Opel&rsquo;s chairman, said yesterday.<br /><br />&ldquo;The restructuring plan developed at the end of last year is still the basis for a profitable business model. The plan foresees a 30 per cent cut in structural costs,&rdquo; Lutz told the Swiss Sonntag newspaper. &ldquo;We will now analyse the current situation carefully and propose relevant measures. We don&rsquo;t expect any fundamental differences to the models discusssed so far.&rdquo;<br /><br />GM left leaders in Berlin and Moscow seething last week when it dropped plans to sell a 55 per cent stake in Opel to Magna and its Russian partner Sberbank. <br /><br />GM will instead restructure Opel itself in a &euro;3bn revamp it wants countries with Opel plants to help finance. The goal is to cut fixed costs at Opel by 30 per cent -- in part by chopping a fifth of Opel&rsquo;s 50,000 staff. <br /><br />Lutz said the main reason GM had decided not to sell a stake in Opel was because GM&rsquo;s business position had improved and there were also brighter signs in the European economic climate.<br /><br />&ldquo;We are all rather optimistic at the moment and see small signs of a mild recovery. There could be a slight recovery towards the end of the year, which would hopefully continue in 2010 and 2011,&rdquo; he said.