GM's Europe Unit to Suspend Production on Sales Drop (Update1)
By Chris Reiter
Oct. 7 (Bloomberg) -- General Motors Corp.'s European unit plans to reduce production by about 40,000 vehicles by the end of the year as credit-market turmoil causes a drop in car sales.
The Adam Opel brand's factory in Eisenach, Germany will start a three-week production halt next week, while the plant in Bochum, Germany, is completing a two-week closure, Andreas Kroemer, a spokesman for the Ruesselsheim, Germany-based division, said in a telephone interview.
``The financial crisis is impacting demand,'' Kroemer said. ``We don't want to stockpile.''
The cuts are equivalent to 2.3 percent of the 1.74 million vehicles that Detroit-based GM built in Europe last year. Auto- industry sales in the region dropped 16 percent in August, the biggest monthly decline since 1999, with GM brands reporting an 18 percent drop. Competitors such as Bayerische Motoren Werke AG and Daimler AG, the world's two biggest makers of luxury cars, have been reducing production in recent weeks in response.
General Motors' temporary shutdowns also affect plants in Ellesmere Port and Luton, in England, as well as Zaragoza, Spain, reducing production of the Astra, Corsa and Zafira models, Kroemer said. The U.K. plants make cars under the Vauxhall brand. Opel's Ruesselsheim factory had already scaled back production to prepare assembly lines to build the new Insignia, he said.
Labor Objections
Labor representatives at Opel said that they weren't consulted about the plans to cut production. Klaus Franz, head of the division's works council, said he will seek to halt the production cuts by court order, should the two sides fail to reach an agreement.
``We see the difficulties in the automobile market, but we think these problems need to be solved jointly,'' Franz said in a telephone interview.
GM's plant in Trollhaettan, Sweden, which makes Saab-brand cars, will lose a shift because of the cutbacks, Franz said. Kroemer said he wasn't immediately able to comment.
BMW outlined plans in August to reduce production by 20,000 vehicles, equal to 1.3 percent of its deliveries in 2007, and said on Oct. 2 that it may deepen the cutback. The company's Leipzig, Germany, plant, where it makes the 1-Series compact, is halting work for four day as part of the production cut.
The move is in response to a decline in the U.S. car market, which shrank in September for an 11th consecutive month. Munich- based BMW's U.S. sales plunged 26 percent last month, causing its year-to-date sales in the country to fall 4.8 percent.
Stuttgart, Germany-based Daimler said today that worldwide sales at its main Mercedes-Benz Cars division in September fell 2 percent to 122,200 cars and sport-utility vehicles, with western European deliveries declining 3.3 percent and U.S. sales dropping 8.5 percent.
The company said on Aug. 6 that it was scaling back production by 45,000 vehicles, or 3.5 percent, with its Sindelfingen, Germany, plant starting its year-end holiday on Dec. 17.
To contact the reporter on this story: Chris Reiter in Berlin at [email protected]
Last Updated: October 7, 2008 09:16 EDT
By Chris Reiter
Oct. 7 (Bloomberg) -- General Motors Corp.'s European unit plans to reduce production by about 40,000 vehicles by the end of the year as credit-market turmoil causes a drop in car sales.
The Adam Opel brand's factory in Eisenach, Germany will start a three-week production halt next week, while the plant in Bochum, Germany, is completing a two-week closure, Andreas Kroemer, a spokesman for the Ruesselsheim, Germany-based division, said in a telephone interview.
``The financial crisis is impacting demand,'' Kroemer said. ``We don't want to stockpile.''
The cuts are equivalent to 2.3 percent of the 1.74 million vehicles that Detroit-based GM built in Europe last year. Auto- industry sales in the region dropped 16 percent in August, the biggest monthly decline since 1999, with GM brands reporting an 18 percent drop. Competitors such as Bayerische Motoren Werke AG and Daimler AG, the world's two biggest makers of luxury cars, have been reducing production in recent weeks in response.
General Motors' temporary shutdowns also affect plants in Ellesmere Port and Luton, in England, as well as Zaragoza, Spain, reducing production of the Astra, Corsa and Zafira models, Kroemer said. The U.K. plants make cars under the Vauxhall brand. Opel's Ruesselsheim factory had already scaled back production to prepare assembly lines to build the new Insignia, he said.
Labor Objections
Labor representatives at Opel said that they weren't consulted about the plans to cut production. Klaus Franz, head of the division's works council, said he will seek to halt the production cuts by court order, should the two sides fail to reach an agreement.
``We see the difficulties in the automobile market, but we think these problems need to be solved jointly,'' Franz said in a telephone interview.
GM's plant in Trollhaettan, Sweden, which makes Saab-brand cars, will lose a shift because of the cutbacks, Franz said. Kroemer said he wasn't immediately able to comment.
BMW outlined plans in August to reduce production by 20,000 vehicles, equal to 1.3 percent of its deliveries in 2007, and said on Oct. 2 that it may deepen the cutback. The company's Leipzig, Germany, plant, where it makes the 1-Series compact, is halting work for four day as part of the production cut.
The move is in response to a decline in the U.S. car market, which shrank in September for an 11th consecutive month. Munich- based BMW's U.S. sales plunged 26 percent last month, causing its year-to-date sales in the country to fall 4.8 percent.
Stuttgart, Germany-based Daimler said today that worldwide sales at its main Mercedes-Benz Cars division in September fell 2 percent to 122,200 cars and sport-utility vehicles, with western European deliveries declining 3.3 percent and U.S. sales dropping 8.5 percent.
The company said on Aug. 6 that it was scaling back production by 45,000 vehicles, or 3.5 percent, with its Sindelfingen, Germany, plant starting its year-end holiday on Dec. 17.
To contact the reporter on this story: Chris Reiter in Berlin at [email protected]
Last Updated: October 7, 2008 09:16 EDT
