GM cuts production in Europe
GM cuts production in Europe
Automotive News | October 7, 2008 - 9:23 am EST
MUNICH — General Motors will halt production in all its European plants except Rüsselsheim later this month in response to slowing new-car sales.
GM will cut production by 40,000 units by closing its factories from October 20 to October 31, GM Europe’s employee forum said in a statement.
Union bosses at the company today said they are taking legal action against the carmaker because they were not consulted about the move.
Klaus Franz, who chairs GM Europe’s employee forum, said factory work councils are concerned that they were not informed about the stoppage.
"Workers’ delegates do not accept the one-sided approach of the management because such difficult situations can only be solved by working with the employees," Franz said.
GM’s Rüsselsheim plant near Frankfurt will not be part of the stoppage because it builds the Opel/Vauhall Insignia, which is just being introduced onto the market.
"In the present situation stockpiling wouldn’t make sense with regard to the residual values of our products," GM Europe said.
GM, whose brands include Opel, Vauxhall, Saab and Chevrolet vehicles in Europe, said local managers would review new production levels with employee representatives.
Increasing numbers of carmakers are cutting production as new-car sales fall on the back of a squeeze on credit, deteriorating consumer confidence and the global financial crisis.
New-car sales in western Europe fell by 9.2 percent to 1.21 million units in September, according to J.D. Power Automotive Forecasting. The market forecaster says the market looks likely to fall by 7 percent to 8 percent in 2008.
On Monday, Volkswagen said it would close the Czech factories of its Skoda brand for a week at the end of the month due to poor demand.
