General Motor’s European arm is facing major job cuts and even entire plant closures

General Motor’s European arm is facing major job cuts and even entire plant closures as company bosses race to stem the huge losses being suffered by the Opel and Vauxhall divisions.

US-based city analysts are predicting that as many as 4000 jobs could be cut over the next two years. Closing a factory cannot be ruled out, according to industry experts, with Opel’s German Bochum plant most vulnerable on paper.

GM Europe lost around £450m in 2011 after losing £1.2bn in 2010. According to news agency reports, two US-based analysts are predicting that that GM will have to spend between £600m and £760m on ‘restructuring’ Opel-Vauxhall in an attempt to stem the losses.

Dan Akerson, GM’s CEO, said last week that Opel-Vauxhall production collapsed 20 percent in the last three months of 2011, a reflection of impact the crisis around the Euro is having on consumer confidence. With European car sales likely to continue to be weak in 2012, GM bosses will have to move quickly to prevent another year of huge losses.

Akerson told city analysts that he expected a concrete plan to emerge ‘in the next couple of months’ after talks with Unions and works councils, but admitted that a reduction in capacity at GM Europe’s factories was a virtual-certainty. Opel-Vauxhall sales fell 20 per cent in January this year so GM bosses will be racing to reduce excess production capacity to meet the EU sales collapse.

Akerson has said that he wants to hit 100 per cent capacity utilisation, which makes a factory closure more likely. However, GM is likely to face serious opposition to closure of Bochum, which is less productive than Vauxhall’s Ellesmere plant in the UK but also likely to be defended vigorously by powerful German unions. Plans to build Chevrolet models in European factories to increase capacity utilisation are also possible.

Hilton Holloway

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21 February 2012

[quote Autocar] Opel’s German Bochum plant most vulnerable on paper[/quote]

No German car factory has closed since 1945. They are protected by the State Subsidies. Cuts will be hardest in Belgium, Spain and the UK.

21 February 2012

[quote Chris Searle]No German car factory has closed since 1945. They are protected by the State Subsidies. Cuts will be hardest in Belgium, Spain and the UK[/quote].

I suspect that if a European plant is shut, it'll be a British one. At the moment all Euro Corsas are built in Zaragosa and all Euro Insignias in Russelsheim. The Astra, however, is made in Ellesmere Port, Bochum and Antwerp so these is scope to consolidate production if maximum capacity at these 3 sites is not currently being achieved, but if Bochum is protected by state subsidies this will leave Ellesmere Port or Antwerp and I fear it will be the former, unless production changes to other products like engines (like Ford's Dagenham plant) and secures the future of the Merseyside factory.

21 February 2012

[quote Lanehogger]this will leave Ellesmere Port or Antwerp[/quote]

Antwerp was closed in the last round of cuts

21 February 2012

[quote Lanehogger]I suspect that if a European plant is shut, it'll be a British one. [/quote]

I am not completely up to speed with the whole German factor workers union situation and why it is so difficult to close factories out there but surely closing Ellesmere Port is only a short term solution that could cost them more in the long term.

The old saying comes to mind - treat the cause of the problem, not the sympton.

 

 

It's all about the twisties........

21 February 2012

What happened to the earlier article (same date) on this? Did it get Axed?

21 February 2012

TI hope these cuts stop the rot.I feel for the workers who will lose their jobs with little prospect of further employment in this current economic climate.Opel/Vauxhall have the best range of cars they have had in years too.

21 February 2012

Chevrolet Aveo 1.3 VCDi 95 Eco LT

8 out of 10

Price: £12,795

Vauxhall Astra 1.3 CDTi 95 ecoFLEX Exclusiv

Test date 13 July 2010 Price as tested £18,700

Vauxhall/Opel 50% dearer!!

21 February 2012

As predicted.

I wonder if they'll include Buick in any proposed restructuring or wait until it's complete before adding the US Unions into the mix.

Frankly it does make Elsemere Port look like an easy target no matter how much more efficient it gets. Still it'll do it no harm to get even better and make the decision for GM as hard as possible.

21 February 2012

[quote Flash Harry]TI hope these cuts stop the rot.I feel for the workers who will lose their jobs with little prospect of further employment in this current economic climate.Opel/Vauxhall have the best range of cars they have had in years too.[/quote]

Completely agree.

The rot does appear to be in Germany though and I just hope GM management can see this.

 

 

It's all about the twisties........

21 February 2012

[quote sierra]Vauxhall/Opel 50% dearer!! [/quote]

You do know that you are comparing two completely different classes of car don't you Sierra? The Aveo 'competes' in the supermini class. It's probably still significantly cheaper than the Corsa but comparison with the Astra is irrelevant.

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I am not a robot

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