GM Europe hit hard by slump

by John Revill, Automotive News Europe

General Motors Europe will have more temporary plant shutdowns this year and next year because of likely poor financial results and collapsing sales of its key Opel brand.

Nearly all of the company's factories in Europe will be affected as the carmaker fights a market downturn that has knocked 11.3 percent from its western European sales in the first nine months of the year. The drop is nearly twice as big as the declines suffered by other big losers such as Ford and PSA/Peugeot-Citroen.

In September, Opel's new-car sales crashed in some of its top markets, including Germany and Spain. Sales of sister brand Vauxhall fell steeply in the UK.

Opel/Vauxhall accounts for more than 80 percent of GM Europe's business. Opel's sales slide is much worse than volume rivals.

GM now plans to extend what was expected to be a short-term production shutdown program at most of its European assembly plants. The program started this month.

Last week, Rainer Einenkel, head of the works council at the Opel plant in Bochum, Germany, was quoted by the Westdeutsche Allgemeine Zeitung as saying GM was considering closing its European plants during the last two weeks in November.

Einenkel said plants could also close from December 15 to the end of the year and employees could be offered early retirement buyouts.

GM Europe union representatives would not comment to Automotive News Europe, but Chris Preuss, GM Europe's communications head, said: "We continue to manage our capacity in line with the softening market demand. That will mean further plant idling as necessary through the end of the year."

Preuss added: "We have a very difficult and intense economic situation. The market has seen a significant downturn in nearly all parts of Europe. Between now and the end of the year we are going to have to lower our production schedules to keep our inventory levels in line with what the market demands."

From Automotive News Europe (A Crain publication)