GM CHANGES EUROPEAN OPERATIONS

NEW YORK, April 7, 2004; Reuters reported that General Motors Corp. is preparing for major changes in its European automotive operations, which have lost money for years, officials said.

"When you've got a company that is constantly losing money, obviously changes have got to be made, everybody realizes that," GM Vice Chairman Bob Lutz told reporters late Tuesday ahead of the New York auto show.

GM Europe missed its goal of substantially cutting losses last year, and reported a loss of $909 million before income taxes and other items. This year, GM has targeted improved results, expecting earnings of between breakeven to a $100 million profit.

Lutz was appointed interim head of GM Europe in February replacing Mike Burns, who quit to become chief executive officer of automotive parts supplier Dana Corp.

Lutz said that he is laying the groundwork in Europe for the arrival of Fritz Henderson, the president of GM Asia Pacific, will move to take over the European operations on June 1.

Lutz, who headed Ford Motor Co.'s European operations in late 1970s and early 1980s, has spent considerable time recently in Europe, GM officials said.

GM has eliminated layers of redundancies and bureaucracy in North America over the past decade. But accomplishing that feat in Europe, including fully integrating the Saab luxury vehicle division with the Opel division, is complicated by Europe's many languages and currencies, GM officials said.