Still No Concrete Measures for GM’s Opel Unit image

General Motor Co.’s (GM) European Adam Opel AG unit declared that talks with labor unions will continue but he didn’t elaborate on any concrete measures.

Both sides “agree that Opel needs to operate profitably and take measures to increase revenue, improve margins and reduce costs,” Opel said.

Over the last decade the restructuring programs didn’t manage to bring GM’s Opel unit on the floating line again, so the company prepares a renewed attempt to stop the cash burn. Although analysts believe that the company will inevitably have to close some of its European facilities, Opel will not accept the ongoing losses and plans to increase production. Since Europe has been GM’s only loss-making market in 2011, the demand for new cars in the region has been shrinking for years.

Although Opel Chief Executive Karl-Friedrich Stracke declared recently that a labor deal which rules out plant closures in Europe until the end of 2014 remains valid, analysts believe that painful restructuring measures lie ahead once the labor deal expires, despite fierce opposition from labor unions. Opel has been trying to bring up sales in Europe and China, but nobody knows when the company’s exports would reach a significant volume to help the brand turn to profit again.