FRANKFURT – General Motors will neither sell its loss-making European unit Opel nor "simply close up shop and leave", Chief Executive Dan Akerson told more than 5,000 staff in the brand's headquarters in Ruesselsheim on Thursday.
"As a global auto company, GM needs a strong design, engineering, manufacturing and sales presence in Europe. There's room for Chevrolet in Europe but Opel fulfills that role," he said in a copy of a speech.
"Recommendations that we 'cut and run' show you that some people simply do not see how important Opel is to our success," Akerson said.
Akerson has come under pressure from investors to divest or unwind Opel, which Morgan Stanley forecasts will post another $1 billion in annual operating losses on average through 2021 after $16 billion over the past dozen years.
While his number two, Steve Girsky, has defended Opel in public and called it "vital" to the operations of GM, analysts believed Akerson was open to a more radical approach given his minority view to sell Opel to Magna late in 2009.
"The fact is we lack economies of scale in critical areas and if we can achieve scale by partnering with PSA, that's what we are going to do," Akerson told Opel's workers, referring to French carmaker Peugeot .
Earlier this week, people familiar with the matter said GM and Peugeot have halted talks on a deeper tie-up amid misgivings about the French carmaker's worsening finances and government-backed bailout.
(Reporting By Christiaan Hetzner; Editing by Maria Sheahan)