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GM invests in Saab while Ford Europe announces cuts

General Motors is said to be planning to invest up to £350m a year in Saab Automobile in a push to double volumes – while Ford says it plans to cut European expenditure by £1.5 billion.

According to the Financial Times, the GM announcement was made by Peter Augustsson, Saab president at the Geneva motor show. The investment is meant to increase output from 132,000 last year to 230,000-250,000 by 2006 exploiting the brand's standing in the premium sector.

Nick Scheele, Ford Europe chairman, has also said its fixed costs would be reduced by £862m while variable costs would fall by about £690m in the next two years as part of the turnaround strategy for Europe.

The fixed cost savings would come from the end of car assembly at Dagenham in 2002 and improved capacity utilisation at its remaining European plants. Variable costs would be reduced through lower cost supplier arrangements and cuts in logistics and distribution expenditure.

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