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GM Europe Seeks Profitablity by 2013

Associated Press
Published | Updated

BERLIN – GM Europe's president hopes that carmaker Opel will make a profit before 2013, the target that its prospective new investor has set, according to an interview published Thursday.

Canadian auto parts supplier Magna International Inc. hopes to complete by September a deal under which it and state-controlled Russian lender Sberbank will take a majority stake in Opel, General Motors Corp.'s main European unit.

Earlier this week, Magna chairman Frank Stronach predicted that Opel would break even in three years and turn a profit in four years.

"My full ambition has been aroused" by those remarks, GM Europe president Carl-Peter Forster was quoted as telling Germany's Bild daily. "We will do everything we can to make a profit before 2013."

Forster declined to comment on GM Europe's possible financial performance this year, saying that "predictions are impossible in times like these," Bild reported.

Magna, GM and German officials on Saturday hammered out an agreement for the Magna consortium to move forward with a rescue plan for Ruesselsheim, Germany-based Adam Opel GmbH.

Opel on Tuesday received the first $425 million installment of a $2.5 billion bridging loan granted by the government to keep the company afloat while work continues to conclude the takeover. Magna and German officials have stressed that its successful conclusion is not yet assured.

"Magna has rightly noted that there are no signed takeover contracts yet," Forster was quoted as saying. "There are still a whole lot of difficult details to clear up, but we have a clear target: Opel's future."

German government spokesman Ulrich Wilhelm said Wednesday that, since there is only a preliminary deal so far, "talks are still ongoing and the process as a whole is still open for all bidders," a point that he said German and U.S. authorities and GM had underlined repeatedly.

Italy's Fiat Group SpA, Magna's main rival, pulled out of talks last week because of what it said were "unreasonable" funding demands but said it remained interested.