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GM Europe struggles, PAG losses hit £197m

The Ford Premier Automotive Group – Jaguar, Aston Martin, Volvo, Land Rover – suffered a £197m pre-tax loss for the second quarter of the year, compared with a £90m profit in 2003, prompting speculation of cost cutting, including job losses.

General Motors struggled in Europe during the second quarter, although it did enjoy a “reasonably good” period from a global perspective, according to chairman and CEO Rick Wagoner.

GM Europe reported a loss of £24.5m, against a £1.6m loss in 2003 despite raising market share from 9.3% to 9.8%. Price competition, foreign-exchange losses and restructuring costs for GM’s share of the GM-Fiat powertrain joint initiative were partially offset by cost improvements.

“We have to pick up the pace in new model introductions while we reduce costs,” says Wagoner. “That’s a tough assignment and will require GME to do a better job of leveraging global resources.”

Ford PAG, hurt by exchange rates, high costs and poor product mix, is unlikely to breakeven this year. Jaguar looks to be in line for major restructuring which could include job cuts. But Ford of Europe did better, achieving profits of £115m (excl. special items), compared with a loss of £285m.

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