GM sees European ops profitable in 2011 at earliest

FRANKFURT (Reuters) - General Motors Corp forecast its European business, which encompasses its Opel/Vauxhall brand, will post a profit in 2011 at the earliest after $1.2 billion in cost cuts which may include plant closures.

"Similar to the U.S., the company's European operations are also expected to produce significant negative earnings and cash flow in 2009 and 2010," it said in its restructuring plan presented to the U.S. Treasury on Tuesday.

GM added that the principle issue for GM in Europe is a near-term lack of liquidity, for which it is in talks with the German and Swedish governments over state aid for Opel and Saab.

"Reflecting ... significant reductions in structural costs -- including significant manufacturing consolidation and labor cost savings -- GM's operations in Europe are expected to produce positive financial results in 2011-2014," it said.

GM, which is seeking an additional $16.6 billion from Washington after already receiving $17.4 billion in loans, said it was in talks with European labor representatives over the $1.2 billion in cost cuts which could include "several possible closures or spinoffs of manufacturing facilities in high cost locations."

Media reports have cited GM's production sites in Belgium's Antwerp and Bochum in Germany as endangered, along with Saab's plant in Trollhattan.

(Reporting by Christiaan Hetzner; Editing by David Holmes)