General Motors Plans Major European Reorganization

The world's leading auto-maker, General Motors, announced Friday it would streamline its European business and concentrate much of its key activities in Zurich, Switzerland. GM subsidiaries, such as Germany's Opel and Sweden's SAAB, will be primarily engaged in manufacturing. Under the restructuring plan, Opel CEO Carl-Peter Forster is being promoted to become president of General Motors Europe -- a move that will put him not only in charge of Opel, but also of British car-maker Vauxhall and SAAB. General Motors has decided to combine the operations of its previously autonomous European units, with Forster running the show from the company's European headquarters in Zurich. Due to the slump in the European auto industry, GM's European operations have been losing money for the past four years, and the company says a return to profit in Europe "is critical." During the first quarter of 2004 alone the regional unit lost $116 million.