General Motors is expected to report lower fourth-quarter earnings per share after some analysts said Opel unit, which has been battered by economic turmoil has lost more than $300 million in the fourth-quarter, Reuters said.
Company insiders expect GM to disclose a full-year loss for Europe of about €1bn on Thursday when it reports annual results.
According to Citi in its report on February 8, the Wall Street Journal reported that GM is seeking a deeper restructuring at Opel as it prepares to disclose steep Q4 losses in Europe.
“It’s a mess,” said Michelle Krebs, a senior analyst at Edmunds.com.
“GM’s back is against the wall on Opel.
It just is going to have to do something there. So I think we will see something coming in that regard.”
Opel, closed in December its plant in Antwerp and cut about 8,300 jobs. Now GM may look to close plants in Ellesmere Port, England, and Bochum, Germany, said Brian Johnson, an industry analyst at Barclays Capital. GM’s plant utilization rate in Europe is 78 percent and is expected to fall to 69 percent this year and more after that, Johnson said.
GM, which lost $580 million in Europe through the first nine months of 2011, is not alone as it struggles there. U.S. rival Ford Motor Co’s losses in Europe nearly quadrupled in its most recent quarter.