Firstly, what seems clear is that GM Europe is indeed looking to take out up to a third of its 1.5 million units of capacity in Europe, and that may well involve the closure of two assembly plants - although CEO Karl-Friedrich Stracke recently stated that he would honour a two-year old agreement not to shut any plans before the end of 2014.

Stracke also stated that the firm's plants were operating at only 80 percent capacity (some would say even lower). Such spare capacity is a killer for the firm (and indeed much of the non-German European auto industry) as it means a failure to achieve economies of scale in assembly, meaning higher costs - as well as being a likely indicator of a failure to sell enough cars to recover the costs of new model development.

So capacity reduction is the first element in GM's strategy, as much of the media have picked up on.

But more than simply cutting capacity so as to align supply and demand in Europe, the second element of GM's strategy appears to be to shift production out of western Europe to lower-cost countries.

The German magazine Der Spiegel recently claimed that an internal GM document titled 'Global Assembly Footprint' indicated plans to produce more cars in low cost locations such as Brazil, China, India, Mexico, Poland and Russia. Der Speigel suggested that as many as 300,000 extra vehicles would be exported from China, Korea and Mexico to Europe by 2016 under the plan.

In stark contrast, unions are pressing GM to use its European capacity more effectively, for example by building Chevrolet models in Europe, when so far they have imported from Korea (and bizarrely which then compete with smaller GM Europe models, thereby cannibalising GM Europe's home market). But GM doesn't appear to be considering this seriously as an option.

The third element is an attempt to reduce costs even at European plants that remain open by engaging in a divide and rule game whereby GM signals that it has excess capacity and then plays off plants against each other so as to screw down costs and wages and to get workers to work as flexibly as possibly. Ideally from the firm's point of view it would also involve some state support in terms of new model launches so as to 'safeguard' plants and jobs - at a cost to the taxpayer.

Some academics studying the European car industry have suggested that GM has had more capability to engage in such "coercive comparisons" as it has followed a deliberate production strategy of setting up parallel lines of production across countries through widespread platform sharing. In contrast some other firms (Ford, Daimler and VW) displayed varying degrees of specialisation across countries and hence had a lesser ability to undertake such actions (see a paper here reviewing some recent discussion on divide and rule in the auto industry).

In reality, such practices are common in the industry especially at times of over-capacity, and will mean that GM Europe will look to not only cut capacity but also squeeze concessions out of remaining plants to screw down costs. This is why we shouldn't have expected plants being named last week as doing so would have effectively reduced GM's ability to wring further cost reductions from plants through a divide and rule game.

Interestingly, unions have warned GM that they won't engage in restructuring talks in Europe at the local level, in an attempt to counter a divide and rule strategy. Union leaders recently issued a simple one-sentence open letter to Opel's CEO Stracke saying "we will not negotiate with you on local level."

Of course, some argue that GM would ideally like to rid itself of GM Europe. But that isn't credible. GM is globally too dependent on its European arm for platforms and small engine technology - the latter becoming increasingly important given shifts in consumer sentiment to more fuel efficient engines and the development of small and medium sized car platforms. In addition, GM would be concerned about who might buy the division, and whether the technology it has developed might then be used to compete with GM globally.

So GM's 'strategy' appears to be a three-pronged approach to shrink its retained European operations, shift some activity elsewhere and to play-off workers and plants so as to cut costs as far as possible.

Professor David Bailey works at Coventry University Business School