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New General Motors head Mary Barra promises new vehicle production, investment for German unit

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RUESSELSHEIM, Germany - New General Motors chief Mary Barra has stressed the company's support for its struggling Adam Opel AG subsidiary in Europe, saying Opel workers will get the job of building a new vehicle at the main plant in Germany.

Barra said it was "no accident" that Opel's headquarters in Ruesselsheim was the destination for her first foreign trip since becoming CEO on Jan. 15.

"I thought it was very important to reinforce in person my commitment and GM's commitment to Opel," she said during a brief appearance before journalists Monday. She called Opel "clearly a vital part of our company."

Barra reiterated the commitment made last year by her predecessor Dan Akerson to turn Opel around after years of losses.

She said Opel's Ruesselsheim assembly plant would be the site for a new vehicle that for competitive reasons she couldn't name. The plant, which produces the Insignia model, will lose production of the Astra compact when the current model is replaced. The company is closing another plant in Bochum at the end of this year.

General Motors Co., which has headquarters in Detroit, considered selling Opel to Magna International in 2009 but changed its mind. Akerson went to Germany last year and underlined the automaker's commitment to turning its European business around by rebuilding its brand image and launching new models.

GM now aims to return Opel to break-even by mid-decade, and is plowing 4 billion euros ($5.5 billion) into the European business. Opel will roll out 23 new models and 13 new engines over the next several years.

Barra cited the company's success with recent models such as the tiny Adam city car and the Mokka small SUV as grounds for optimism. Opel's market share inched up to 6.8 per cent in the European Union from 6.7 per cent last year. Still, GM lost $214 million in Europe in the third quarter.

Europe's mass-market carmakers are struggling with weak demand in an economy that is recovering only slowly from a financial crisis. The economy is growing again but unemployment remains painfully high at 12.1 per cent.

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