GM Europe chief sees sales slumping

NEW YORK (Reuters) - General Motors Corp's (GM.N) head of European operations said rising oil prices, high commodity costs and the strength of the euro could drive European sales down to levels not seen in decades.

Noting that sales have been strong in Eastern Europe, GM Europe President Carl-Peter Forster said, "it's clear that the business in the mature North American and certain European markets could be dragged down to lows we haven't seen since the recessionary days of the early 80's."

His comments were published in a blog posted on GM's website on Monday.

"To put it bluntly, the rise in oil is having a profound and permanent impact on the fundamentals of our business - and not just in North America," Forster wrote.

"Adding insult to injury, while energy costs are draining the consumer side of our financial equation, the impact of skyrocketing commodity prices and the huge disparity between the Euro and most other currencies are seriously dragging down the production side of things here in Europe."

Forster said that unlike other serious downturns in GM's history, the car maker is pumping investment into future product programs.

In the United States, GM has been cutting costs and production capacity in North America as part of its overall turnaround effort.

It recently announced a review of the Hummer brand, which could fetch $750 million in a sale, though industry sources are skeptical of how much interest there is for the maker of the giant sports utility vehicle.

In its last quarterly results statement, GM posted a narrower-than-expected loss as sales gains in Asia and Latin America overshadowed a slump in the U.S. market. It has lost a combined $51 billion over the past three years, but said the quarterly results pointed to some progress in its turnaround effort.

In April, GM agreed not to close five European plants or lay off 10,000 workers employed there through the end of 2016.

(Reporting by Christopher Kaufman; Editing by David Cowell)