General Motors plans to mostly withdraw its Chevrolet brand from Europe in a sharp reversal of its global strategy for its most iconic brand.

The move, which the company announced at about 3 a.m. Eastern time in a press release Thursday, means GM will record net special charges of about $700 million to $1 billion, including about $300 million of non-cash charges, mostly in the fourth quarter.

GM spokesman Dave Roman said in an email that the Chevrolet decision will not affect the automaker's plan to break even in Europe by mid-decade.

GM's Chevrolet sales in Europe fell 18% through October to 121,621 units. The Opel and Vauxhall brands posted a 3% decrease to 702,481 vehicles.

The company has lost money in Europe every year of this century, including $499 million this year through September, down from $1.2 billion during the same period in 2012.

The company will continue selling Chevrolets in Russia, which GM recently shifted into its European business unit. But the brand will largely disappear from dealerships in Western and Eastern Europe.
GM CEO Dan Akerson has acknowledged that the company's Opel brand was competing directly with Chevrolet in Europe, where consumers are still trying to shake off a sovereign debt crisis that slammed the market for cars. By removing Chevrolet, the automaker clears the way for Opel to be more successful.

"Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac," Akerson said in a statement. "For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest."

GM said it would focus mostly on selling its Europe-based Opel and Vauxhall brands on the continent, as well as a renewed emphasis of its luxury Cadillac brand. The company said "select iconic" Chevrolets, such as the Corvette Stingray, would still be sold in Europe.

Most Chevys the company sells in Western and Eastern Europe are built in South Korea, where GM has been tussling with unions. The automaker did not say whether it would close any plants as a result of the move.

GM said in a statement it would "increase its focus on driving profitability, managing costs and maximizing sales opportunities in its Korean operations as the company looks for new ways to improve business results in the fast-changing and highly competitive global business environment."

In addition to the chargest associated with the move, GM said it "expects to incur restructuring costs related to these actions" that will reduce the company's International Operations unit earnings in 2014.

"We will continue to become more competitive in Korea," GM Korea CEO Sergio Rocha said in a statement. "In doing so, we will position ourselves for long-term competitiveness and sustainability in the best interests of our employees, customers and stakeholders, while remaining a significant contributor to GM's global business."

The move comes after GM in 2012 signed a seven-year, $600 million sponsorship agreement with European soccer franchise Manchester United to promote the Chevy brand.

GM said today that the decision to stop selling Chevrolet in Europe does not affect the sponsorship. GM has repeatedly said that Manchester United's global appeal made the deal worthwhile.
"It is a global partnership, very much focused on the fans in Asia and specifically China," GM spokesman Vijay Iyer said in an email. "The next big step will be the Season 2014/15 when the Chevrolet Bowtie will be featured on the Man United shirt."