The European and U.S. strategies for dealing with the slumping automotive industry are about 180 degrees apart, an auto union official said.
"In the U.S., you get money to close down factories, In Europe, you get money to keep them open and safeguard jobs," Klaus Franz, a union official at Opel in Germany told The New York Times Tuesday.
This week, General Motors Corp. could file for bankruptcy and 20 percent of Chrysler LLC could end up in the hands of Fiat SpA, The Detroit News reported.
But U.S. automakers will emerge from their troubles with trimmed down costs, while the European industry is haunted by some stark figures, the Times said.
Since 2004, U.S. automakers have shed 319,000 jobs, while European auto companies have held close to the 2.3 million workers they had five years ago. At the same time, the 27-member European Union cranks out 30 percent of the world's vehicles, but has less than 10 percent of the world's population.
Primarily, European car exports rely on luxury models, as opposed to Japan, which largely exports cars for middle-income families.
"Too many players and too much capacity is a recipe for value destruction," Stuart Pearson, an analyst with Credit Suisse told the newspaper.
