US auto maker General Motors (GM) has signed an agreement with Belgian firm Punch Metals to sell its transmission plant in Strasbourg, France, as part of its effort to slash losses in Europe.
Under the agreement, the Belgian firm will acquire the complete Strasbourg operations along with the production plant, the engineering center and the die casting operation.
The company has also signed a long-term supply agreement with automotive supplier ZF, which will buy transmissions from the Strasbourg facility.
Following the transaction, GM will be a customer of Strasbourg operations all through 2013/2014 to assist the facility in maintaining a robust level of activities, while offering a smooth transition to the new ZF-based product line without affecting employment.
The employees of the current facility will be maintained by Punch Metals, while the new owner plans to make additional investment into the facility to attract businesses from other customers.
In November 2012, the US carmaker said that it anticipates a loss between $1.5bn and $1.8bn in 2012 as per the level of restructuring in the fourth quarter, in addition to a 4-5% drop in European auto sales in 2013 over the current year.
