29 September 2004

General Motors Europe may announce a factory closure later this year in order to slash production capacity, and Vauxhall’s Ellesmere Port plant could be under threat.

Fritz Henderson, GME chairman, is visiting each of GM Europe’s plants and will confirm the plans within two months. Henderson said: ‘We have one plant that’s excess. We have to cut capacity because we can’t expect growth.’

It’s unclear how these cuts might be achieved. Removing shifts is a possibility, but a closure looks more likely. Henderson said that GM had planned to build the Vauxhall Vectra/Saab 9-3 replacement in two plants, ‘but now wants to put them in one.’

The current Vectra and 9-3 share a platform but are built in two factories, both of which are under-utilised. Saab’s Trollhattan plant has the capacity to make 200,000 cars a year, but made 114,000 in 2003, while Opel’s Russelsheim plant in Germany built 140,000 cars last year, but has capacity for 250,000.

The factory that loses out ‘will be allocated other products, or close,’ said Henderson.

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