| Opel Unveils Restructuring Plan, to Cut 8,300 Jobs across Europe |
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09/02/2010 15:49 (733 Day 05:21 minutes ago) | |||||
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The FINANCIAL -- General Motors Co.'s Opel unit said Tuesday that it plans to invest C11 billion ($15 billion) in its operations by 2014 as part of its restructuring plan, that will result in about 8,300 job cuts across Europe.
Opel's business plan foresees Opel and its sister brand Vauxhall breaking even by 2011 and be profitable by 2012. That is predicated on economic forecasts that 13.4 million cars will be sold in Western Europe this year, 20% less than in 2007, The Street reports.
According to the same source, Opel said it "does not believe the market will come back to the levels seen earlier in this century for quite some time." To adjust to these forecasted markets, Opel said it plans to reduce capacity by about 20%.
Chef Executive Nick Reilly said as he presented Opel's restructuring plan Tuesday that the automaker is seeking euro2.7 billion from European governments in loans and loan guarantees, AP reports. Parent General Motors Co. has already injected euro600 million along with euro650 million in advanced payments to ensure Opel's cash positions. Reilly said of the process of seeking aid: "our estimate is the overall process will take several weeks until it is completed, but we expect to have sufficient liquidity during this period."
The figure for job losses was in line with that previously given. Opel and British sister brand Vauxhall employ around 48,000 people in Europe, about half of them in Germany, according to the same source. "We have no time to waste," Reilly said. "We need a plan that is going to be realistic about the tremendous economic pressures we face."
The 11bn euros will go towards three major initiatives, Reilly said, BBC reports. First, Opel would be launching eight new models this year, and another four in 2011.
Second, the carmaker aims to be "a leader in alternative propulsion in Europe". To this end, Opel has "aggressive plans" for its Ampera electric car, Reilly said, according to the same source. Finally, it will look to push its exports to the Middle East and Asia Pacific, "where economically viable". Reilly added that the Vivaro van would continue being built at the Vauxhall plant in Luton in the UK until 2013, after which GM would "investigate new business opportunities".
The job cuts will include 1,300 sales and administration positions along with cuts at most of the automaker's manufacturing plants in Europe, Opel said, AP reports. It reiterated that it plans to close the Antwerp, Belgium plant, and let go 2,377 workers there.
Production of the Astra HB3 will be transferred to Bochum. Elsewhere, the company will cut 1,799 jobs in Bochum, Germany; 900 positions in Zaragoza, Spain; 892 in Ruesselsheim, Germany, where Opel is headquartered; 300 at Eisenach, also in Germany; 369 in Luton, England; and 300 in Kaiserslautern, Germany. However, the plants in Gliwice, Poland and Ellesmere Port, England, are set to escape any cuts, according to the same source.
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