GM CEO Dan Akerson and German Chancellor Angela Merkel met yesterday, April 11th, to discuss the future of the loss-making Opel unit.

GM announced it will invest 4 billion euro in its European operations by 2016 to add new models, restore profit and increase market share in the region. Most part of the investment will be focused on the development of 23 Opel vehicles and 13 engines, which will help the automaker break even in Europe by mid-decade, according to CEO Dan Akerson.

“The chancellor welcomes yesterday’s announcement of the investment program,” Steffen Seibert, Merkel’s chief spokesman, said in a statement Thursday. “She is convinced of the innovative capacity of the Opel workers.”

In 2009 Gm refused a deal offered by Merkel’s government to sell its Opel unit to Magna International. In 2010 the government refused GM’s request for aid to reorganize its German operations. GM’s business in Europe consists mainly of its Opel unit, in Germany, and Vauxhall in the UK. Since 1999 GM has lost $18 billion in Europe and the automaker relies on the new models as a revival strategy.

GM will also reduce spending by closing Opel’s plant in Bochum, Germany, as the auto market in Europe heads towards the sixth consecutive year of declines. During the first quarter Opel’s sales in Germany dropped 16%, more than the industrywide fall of 13%, and 17% in March.


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