GM CONSIDERS PRODUCING THE CRUZE AND OTHER CHEVY MODELS IN EUROPE

By Carscoop - Reclaiming the number one spot as the world's best-selling car manufacturer in 2011 must have been quite satisfying for GM management. Still, there is a blemish in GM's ornament as the company's CEO Dan Akerson admits: its loss-making European operations.

Even though Fiat-Chrysler CEO Sergio Marchionne expressed an interest in a possible tie-up with Open, GM vice chairman Steve Girsky quickly responded that the German carmaker and its British division, Vauxhall, "are not for sale".

But while Opel is not up for grabs, Akerson says that the company must do better and should "reevaluate its operations". That's why GM is shifting some of its Cruze compact sedan production to its European plants, in order to return the loss-making (US$13 billion since 1999) operation into profitability, according to a report from Autonews.

In November, Akerson stated that "Clearly, you can't have a unit as important as Opel is to General Motors Co. chronically unprofitable". He reiterated his opinion last week at the Detroit Motor Sho, when he told reporters that the situation at Opel "is not tenable. We can't lost money in perpetuity".

Sources from IG Metall, the biggest workers' union in Germany, told Reuters that GM is negotiating the transfer of the production of certain Chevrolet models from South Korea to Opel's plants. What its management wants in exchange is the union's consent in cost cutting.

The same sources claim that one option would be manufacturing the Cruze at Opel's plant in Poland and moving production of the Astra, which is currently assembled there, to one of its Western European factories.

Another option on the table is assembling the Orlando SUV in the Bochum plant in Germany, which already builds the Zafira MPV. IG Metall has proposed that the same plant, which the company's management had indicated was the one most likely to be closed, to be used for production of the Chevrolet Captiva and Opel Antara SUVs.

Former Opel union boss Klaus Franz said last year that they also wanted the next-generation Agila mini to be built in Poland instead of Suzuki's plant in Hungary where the current model is assembled, or South Korea, and the recently unveiled Mokka small SUV to be built in Spain.

Opel CEO Karl-Friedrich Stracke wants the carmaker to make a US$1.27 billion profit by 2016, increase its European share to 8.5 percent and minimize costs. "We must focus our entire strength into lowering structural costs next year. We must abolish unnecessary processes and get rid of every form of bureaucracy," Stracke said in a recent company newsletter.