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GM’s Opel to close plant in Belgium

 

GM’s Opel to close plant in Belgium


Automotive News | January 21, 2010 – 6:00 am EST

 

MUNICH — General Motors Co. subsidiary Opel announced Tuesday it would close its car assembly plant in Antwerp, Belgium.

“In order to keep Opel going and have a sustainable future we have to take some of these types of decisions," Opel CEO Nick Reilly said at a news conference.

The automaker aims to stop production at the factory in the next few months and eventually sell the land that the factory occupies.

The closure could be completed by June or July, unless an alternative can be found through negotiations with the unions, Reilly said. He added that GM has tried to find an alternative to closing the plant and was unsuccessful.

"You have to face reality," Reilly said. "We are losing money and have to do something about it."

Said Jan Van Aggelpoel of the ACV union: "We remain open until June 2010. Afterwards we will have to see what the possibilities might be. Otherwise, it’s the end."

Due to the global economic crisis, Opel expects the western European car market to be 1.5 million vehicles below the 13.6 million units sold in 2009 and almost 4 million below the market’s peak in 2007. A strong rise in demand is not foreseen in the near future, the company said in a statement, adding that Opel must reduce its production capacity by approximately 20 percent to survive.

More changes to come

The Antwerp closing is the first of several restructuring moves the automaker plans this year. Reilly said there were no other plans for factory closures at the moment but there will be production cuts at Opel’s and UK sister brand Vauxhall’s remaining European factories as well as a slashing of up to 8,300 of the company’s 50,000 jobs.

Of those job cuts, 4,000 are planned in Germany, Reilly said.

Opel/Vauxhall still needs 2.7 billion euros in state aid from European governments and said on Thursday it had made "good progress" in talks.

GM, which lost $88 billion between 2005 and 2008, went bankrupt last summer alongside rival Chrysler Group and was bailed out by the U.S. government in return for a pledge to restructure.

The automaker is selling its Hummer brand, closing Saturn and Pontiac, and said this month it would move ahead with winding down Sweden-based Saab, although bidders for the brand have said they had not yet given up.

Fiat could also close a factory

Antwerp would not be the first Belgian car plant to close. The Opel factory’s shut down revives memories of Renault’s closure of its Vilvoorde factory on the edge of Brussels in 1997.

Opel Antwerp would be the first major European assembly plant to close since Peugeot shut its factory in Ryton, England, and Opel closed its plant in Azambuja, Portugal, both announced in 2006.

And it may not be the last.

Italy’s Fiat S.p.A., which stepped in to help rescue Chrysler, is also cutting back. Its intention to close a plant in Sicily next year has prompted plans for a nationwide walkout in protest on February 3.

The Antwerp plant currently employs 2,606 people, which represents about 5 percent of the Opel/Vauxhall’s European work force.

The factory makes the Astra three-door hatchback, five-door station wagon and Astra TwinTop coupe cabriolet. Since production started in April 1925, more than 13 million cars and trucks have been built at the site.

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