GM CEO: Talks with German unions "constructive"
DETROIT (Reuters) - General Motors Co's (GM.N) chief executive said on Tuesday the U.S. automaker was in "constructive" talks with unions in Germany about its plants there, but declined to address the fate of a factory many analysts expect will eventually be closed.
"We are in discussions with our German unions and others throughout Europe," CEO Dan Akerson told reporters before GM's annual shareholders meeting in Detroit. "They're constructive, they're professional, and it's our hope and expectation that we'll come to some sort of mutual understanding."
Akerson declined to address whether the future of a plant in Bochum, Germany, will be discussed at the GM board meeting later Tuesday, but told shareholders that actions in Europe would include "removing capacity when and where we can." When asked whether the talks with unions would cover Bochum's future, Akerson said they relate to all GM's European plants.
GM is hosting its second annual meeting since emerging from bankruptcy in 2009 and going public in late 2010. The largest U.S. automaker is facing an increasingly difficult environment in Europe, where demand has drastically declined during the region's financial crisis.
Akerson said Europe - where it has lost money the last 12 years - is the company's most important issue. "We have to fix Europe or at least get it to where it isn't draining the corporate coffers," he said.
In New York on Tuesday, Nissan (7201.T) and Renault (RENA.PA) CEO Carlos Ghosn said the companies expect "three to four more years of stagnation" in the European auto business and was "planning for the worst."
GM's Europe business posted a first-quarter loss of $256 million.
In late February, GM announced an alliance with French automaker Peugeot Citroen SA (PEUP.PA) in hopes of reversing years of losses at its Opel unit. But many analysts have questioned the benefits of this alliance.
Akerson said in March it may be two years before the European division is profitable again as the continent sheds overcapacity. He believes the overall industry has an excess of seven to 10 car plants in the region.
Analysts expect GM to disclose more details about its plan to turn around the Europe business at Opel's June 28 board meeting in Ruesselsheim, Germany.
Investors have been focused on the turnaround at Opel, which GM opted to keep in 2009 after halting a planned sale.
In November, Akerson signaled his growing impatience by naming Vice Chairman Steve Girsky to head the supervisory board at Opel. The unit posted a $747 million loss last year.
Speculation that the Bochum plant would close intensified after GM said last month it would halt Astra production at Opel's main plant in Ruesselsheim, with the car to be made only in Britain's Ellesmere Port and Gliwice in Poland.
GM executives have refused to promise workers in Bochum their jobs would be safe after the company's current labor deal with German union IG Metall expires at the end of 2014.
Bochum directly employs more than 3,000, and unions have said many more workers at suppliers and other businesses depend on that plant.
PENSION LIABILITY IS KEY
Akerson also said Tuesday that addressing the company's pension liabilities was key. Earlier this month, the company said it would remove $26 billion, or nearly one-quarter, of its U.S. pension liabilities by offering pension buyouts to some white-collar retirees and shifting responsibility for the plans to a unit of Prudential Inc.
He said GM was not talking to the United Auto Workers (UAW) union about shifting pension liabilities from U.S. hourly retirees to a third party like Prudential, but added he was open to that possibility.
"I'm not saying we're going to do it, but it's certainly something that we would consider if the opportunity arose," he said.
During contract talks last fall with the UAW, GM won an agreement from the American union to discuss ways to lower the automaker's pension risk. Pension payments to retirees represented by the UAW represent the bulk of GM's pension liabilities.
Akerson told CNBC before the annual meeting the U.S. Treasury, which still owns about 27 percent of GM's diluted shares, should outline a plan to unload the stake that does not hurt the company's share price.
He previously said while it was not up to him, an ideal outcome would be for the U.S. government to sell off its stake steadily over 10 quarters.
The U.S. Treasury acquired GM shares as part of the $50 billion taxpayer bailout of the automaker in its bankruptcy. GM stock has fallen to about $22 from its IPO price of $33.
U.S. President Barack Obama's re-election campaign has touted the auto sector bailout as one of his major accomplishments, seeking to draw a contrast with Republican White House contender Mitt Romney, who opposed it.
(This version of the story has been corrected to remove an extraneous word in paragraph 3)
(Additional reporting by Bernie Woodall in Detroit and Nick Zieminski in New York; editing by Jeffrey Benkoe and Gunna Dickson)