(Reuters) - It's not clear whether the weak European automotive market is stabilizing, but executives in the industry are talking more than ever about reducing capacity to match the lower demand in that region, a top General Motors official said on Friday.
GM's Opel unit in Europe has lost $16 billion over the past 12 years and the U.S. automaker has pushed for change at the business. That has included the ouster of the unit's chief executive as well as reducing the number of temporary and contract employees, and cutting the hours of workers at some plants.
However, the drop in industry sales brought on by the euro zone debt crisis has only put more pressure on GM.
"The issues in Europe are not just issues of the General Motors business in Europe," GM Chief Financial officer Dan Ammann said at a Morgan Stanley conference in New York. "There are the issues of the European industry."
Ammann said it was too soon to know whether the European auto market has stabilized or might even get worse. "Too soon to make a call," he said, adding it depended on the market or country.
The Morgan Stanley analyst hosting GM at the event, Adam Jonas, last week issued a research note in which he said it was time for GM to cut ties with Opel. GM has said it has no plans to dump Opel.
Auto industry executives are talking more than ever about the need to reduce capacity in the region to match the lower demand, Ammann said. But he added that closing plants takes time as they are tied so closely to longer product life cycles.
"We see a greater level of at least discussion activity around that today than we've seen in any period in recent history," he said at the conference, which was webcast.
"People are coming to grips with the fact that there has to be over time a fundamental adjustment to capacity or miraculously somehow volumes have to improve, which I think in the current economic environment no one is placing a bet on right now," Ammann added.
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Despite GM's struggles in the region, Ammann said the U.S. automaker remains committed to rolling out new products, citing the "critical" launches later this year of the Opel Mokka small SUV and Opel Adam minicar. He said the product portfolio in the region "is in really strong shape."
As for GM's mainstream Chevrolet brand in Europe, Ammann reiterated that it draw different buyers than the Opel brand. He also said Chevy will increase its market share in the region this year and there were opportunities to continue that trend going forward.
In answer to a question, Ammann declined to reveal whether the Chevy brand is profitable in Europe. He would only say GM sees "a good financial opportunity for Chevrolet in Europe."
(Reporting By Ben Klayman, editing by Dave Zimmerman)