Automatic translation:                  

GM Europe President Forster's letter to the employees

The letter of Carl-Peter Forster, President of General Motors Europe, to the GM employees has been given to the media. Therefore, the letter is published here in the blog. The content of the letter speaks for itself.

The original letter:

To all employees

Message from Carl-Peter Forster

Dear colleagues,

It's obvious from the accelerating decline in sales across all of Europe over the past few months that the financial crisis is taking a firm hold on the industry. The headlines are sobering:

Renault plans to cut 4,000 jobs in France VW announced 5,000 job cuts in its automotive business BMW strikes 8,600 jobs PSA announced 2,700 job cuts in France Nissan cuts 1,680 jobs in Spain Toyota slashes 3,000 jobs in Japan Daimler cuts 3,500 jobs in US

And of course, GM Europe is no exception. We've been working very hard to reduce structural cost as a percentage of revenue within our current labor agreements. Many good and constructive ideas have been advanced over the past few months. But the reality is these efforts are going to come up substantially short as we evaluate the market conditions. In fact, we see no relief from the current sales slump and actually fear that it could get worse. The situation is very clear; as sales drop, our revenue goes down and structural costs as a percentage of that revenue increases. In other words, since we've started our cost reduction efforts, we're actually losing ground, not gaining it.. And this while contribution margins, the profit we make on our car sales, are under significant pressure because of the shrinking market and the shift towards smaller cars. In order to have a viable business, we have no other option than to aggressively attack our structural cost -- like all manufacturers -- to bring our costs in line with the lower levels of demand.

So far, we are not contemplating further headcount reductions, but we will try to achieve our structural cost goals through other measures. Over the last months Management and employees' representatives have held several meetings in order to commonly address this situation, Last Monday, November 24th, we have launched in every country and function working groups with the objective to achieve minimum 10% labor cost reduction in all areas of the business. We will be focussing on three main pillars to deliver the necessary savings:


work time reductionand other labor cost related initiatives.

We will certainly keep you informed about the progress on these discussions.

Meanwhile, I want to be very clear: this approach will inevitably require some sacrifice from all of us, but it is necessary. But I must also warn that if the market conditions in Europe continue to deteriorate beyond the current levels, it's likely that more will be needed to be done to keep our business viable. Let me be clear, this issue has nothing to do with the search for liquidity, or the situation in the U.S. The U.S. operations have taken on restructuring in excess of 30 percent, including tens of thousands of redundancies. This is about addressing the situation we have in the European market as we adapt our operations to the drastically reduced new car market. Stated plainly, if we want a future to look forward to, then we must take these tough measures to get through this difficult period.

Ultimately, it is us, the employees who have the biggest interest in keeping us in business and become profitable for the long term. Courage and perseverance will get us there.

Carl-Peter Forster

Brands, Platforms, Suppliers

Write a comment

See the anti spam word to type (This is to avoid automated comments used to spam)



Plants on the map