'The markets across Europe are experiencing a dramatic decrease in auto sales and it may take years for them to recover,' the company said in a statement. 'The economic crisis and its severe impact in consumer confidence and purchase behavior will require GME to take further restructuring measures, while trying to preserve as many jobs as possible.'

GM Europe President Carl-Peter Forster said 'we are faced with unprecedented challenges as the European markets are becoming dramatically smaller.'

The comments come as GM finds itself up against a Tuesday deadline to submit plans to the U.S. government showing why they should get more U.S. financial aid to keep operating and stave off bankruptcy.

GM and Chrysler LLC got a combined $13.4 billion in government loans so they can survive pending restructuring. If they don't make a successful case for money by March 31, they face the prospect of having the loans pulled, followed by bankruptcy.

The representative of GM Europe's labor force, the European Employee Forum, on Monday, said that any plan by GM to close plants or force layoffs at its Opel and Vauxhall operations 'would have disastrous consequences for the GM brands and companies in Europe and will finish them off.'

Instead, EEF chairman Klaus Franz and vice chairman Rudi Kennes called on GM in a letter to spin off Opel, Vauxhall and Saab as 'the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits.'

In Germany, GM Europe and Opel officials met in November with German Chancellor Angela Merkel to ask the government for euro1 billion in loan guarantees but no decision has yet been made.

Last month, GM said it would put more than 1,500 Austrian workers at a powertrain plant in Vienna on part time work through May 8 because of the poor economy.