14 October 2004

General Motors has delivered the bad news that has been looming over the maker’s European operations for the last few months; it will axe 12,000 jobs - one in every five of its European employees will be shown the door – by the end of 2006.

The maker’s German operations will be the worst hit, accounting for some 10,000 of the total planned lay-offs, or almost a third its total workforce in Opel’s domestic market. The manufacturer’s Bochum and Russelsheim facilities will absorb 4000 of the redundancies each. Elsewhere, 500 will be made to walk from Saab’s Trollhattan facility (right) in Sweden.

The plan doesn’t include the closure of any of these facilities. During recent interviews, GM Europe chairman Fritz Henderson hinted that the closure of either Russelsheim or Trollhattan would be likely, depending on which missed out on the deal to produce the next generation Vectra and Saab 9-3. Both remain under threat.

With two thirds of its workforce chopped however, GM’s Bochum plant now moves under the same sword, labelled the maker’s ‘most uncompetitive plant’ by GM Europe President Carl-Peter Forster, according to Autocar’s sources. Forster went on to suggest that due to unrealistic wage demands, GM pays over the odds for the use of Bochum, and that a strategy rethink would be required if production at the site was to continue.

Henderson stated that ‘the lack of industry growth, the pricing environment and the competitiveness of the market do not allow us to grow fast enough to offset the cost base we have today.’ It is hoped that these measures will save 500 million Euros a year in annual structural costs. ‘We have no choice than to take tough steps to ensure our long-term success,’ he added. However, with question marks over the future of an increasing number of its factories, six new models to launch over the next two years, and an increasingly competitive and demanding marketplace, the toughest of those steps may still lie ahead.

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