General Motors Co CEO Dan Akerson said in Europe the automaker will continue to lose money until 2014.
“I think it’ll be a good year or two before we can achieve profitability in Europe again,” Akerson said at an on-stage interview conducted in San Francisco on Wednesday night.
Industry-wide, Akerson believed there were between seven and 10 excess car plants in Europe and other executives estimate there is 20 percent over-capacity there.
General Motors, the world’s largest automaker has lost money in Europe for the last 12 years.
In recent years, GM and Fiat are the only automakers to close factories — GM’s plant in Belgium and Fiat’s plant on the island of Sicily.
“Any talk of insolvency should be off the table, any talk that we are not committed to Europe should be off the table,” declared Stephen Girsky, vice president of General Motors.
“We are committed to Opel and Vauxhall in Europe,” he said of GM’s two struggling European subsidiaries.
Last week General Motors paid 320 million euros ($423 million) for a 7 percent stake in Peugeot as part of an alliance designed to save the companies at least $2 billion over the next five years.
“We can’t tell you what our play is in Europe,” said Girksy. “We will tell you when it plays out over the next period of months and years … I don’t see the play in Europe showing up in one big bang.”
Both companies in recent years have struggled to sell as many cars as they produce but Peugeot chief executive Philippe Varin said each company would have to deal with production overcapacity separately.
Moody’s Investor Services, a major credit-rating service, said the proposed alliance would be “credit positive” for both GM and Peugeot because of the potential savings from working together.
In 2011, GM lost $US600 million in Europ