Following a $1.95 billion loss in 2010, GM Europe posted a $747 million loss last year. Since 1999, GM Europe has lost a staggering $15.6 billion.
GM has committed to fixing its European operations rather than spinning them off, but the decision will likely cost the company another $1 billion over the next two years. It's estimated that GM will have to sink $600 million into Europe this year followed by a $400 million investment in 2013 in order to stop the bleeding.
"The cost is likely to be steep and the savings not immediate,"¯ Joseph Spak, an analyst at RBC Capital Markets in New York, wrote in a statement to investors.
Some analysts predict the turnaround could cost as much as $1.2 billion.
GM hoped its European operations would break even in 2011, but was forced to scrap that plan in November. The company is now working to better align its production with market demand.
"We have to match capacity with demand, and demand has been falling,"¯ Chief Executive Officer Dan Akerson told Bloomberg. "We are looking at everything in order to achieve a better break- even point, a lower break-even point, and scale. There's more to come on this, I think, in the next couple of months."¯
Even with Europe's poor performance, GM managed to post a full-year net income of $9.19 billion - the best in the company's 103-year history.