Rumours Fly Around New GM European Mid-Size - A Saab or Opel?

FRANKFURT, Feb 29, 2005; Reuters reported that General Motors declined to confirm on Monday a newspaper report that the world's biggest carmaker had picked an Adam Opel plant in Germany to build its next-generation mid-size car. A GM Europe spokesman dismissed as "speculation" a report in the Frankfurter Allgemeine Zeiting that the Opel plant in Ruesselsheim had won the job over the Saab plant in Trollhattan, Sweden. GM is due to announce by the end of March whether it will build its next-generation mid-size car at the Saab plant or at the Opel plant. Swedish newspaper Dagens Nyheter reported late last year that Ruesselsheim had won the contest, which GM later denied.

GM's future mid-size car is set to replace the Opel Vectra and Saab 9-3 and will be built on a common platform. The plant that does not get the work will suffer a severe blow, but will not necessarily shut down, GM executives have said.

GM Europe last year announced plans to slash up to 12,000 jobs in Europe -- most of them in high-cost Germany -- to help stem losses in the region, where it has not made a profit since 1999 and where demand remains slack.

GM Europe posted a 2004 loss of $742 million, widening from a loss of $286 million in 2003. It expects a 2005 loss of approximately $500 million excluding restructuring charges.