Vauxhall/Opel boss Nick Reilly has launched the company's five-year business plan, predicting a return to profitability by 2012 and £9.7 billion of investment by 2014.
"We will build a European company that is profitable, self-sustainable and fit for the long-term," said Reilly. "Today's announcement marks the beginning of a new era for Opel/Vauxhall. It is the biggest overhaul in the company."
The announcement coincides with the publishing of an auditor's report into the company's plans, which opens the way for it to apply for loans or loan guarantees from governments around Europe
Vauxhall and Opel is seeking £2.4bn of loans to run the business through its restructuing plans, and has approached the German, British, Spanish and Austrian governments for support. Parent company GM has already pledged £500m.
As part of the restructuring required to return to profitability, Reilly also confirmed a 20 per cent capacity reduction, requiring around 8300 job cuts across Europe. These will be split roughly as 7000 manufacturing job losses and 1300 sales and administration losses.
The changes will allow Vauxhall and Opel to operate at 112 per cent of its capacity on two shifts or 87 per cent on three shifts, giving it the flexibility to increase production if demand increases.
As previously announced, the UK's Ellesmere Port plant will not be significantly affected, while production at Luton is guaranteed until 2013, despite the loss of around 500 jobs.
Luton currently builds the Vauxhall/Opel Vivaro van in conjunction with Renault, and Reilly confirmed he is in talks with Renault to extend that agreement beyond the end of 2012. He added that if the deal is not extended, he will investigate building an alternative vehicle at the plant.