GM cuts put Vauxhall plant at risk

Vauxhall's Ellesmere Port manufacturing plant is braced for bad news, as parent company General Motors prepares to announce big losses for the fourth quarter of 2011.

According to the Wall Street Journal, GM executives are ready to take drastic measures to turn around the struggling Opel/Vauxhall brand - including job cuts.
Opel/Vauxhall has lost almost £9bn since 1999, and a series of job cuts in 2010 have failed to stem the tide. Further restructuring is therefore on the cards, including significant redundancies and, though unlikely, possible factory closures.

Vauxhall's Ellesmere Port and Opel's Bochum plant in Germany are said to be in the firing line, although The Telegraph reports that trade unions in Germany are confident GM will not renege on its promise not to close any plants before 2015.

German newspaper Westdeutsche Allgemeine Zeitung (WAZ) reports that Opel CEO Karl-Friedrich Stracke wrote an ambiguously worded email to employees yesterday, which has been construed as a warning of imminent cost-cutting measures.

It said that "until now there haven't been any decisions on closing plants, cutting jobs or scaling down production volumes," but added "we without doubt need to resolve certain problems."

Unlike Saab, Opel/Vauxhall seemed to be sailing fairly smoothly through the recession over the last couple of years, having been on the brink of collapse in 2009.

GM was close to selling the whole operation to Canadian company Magna, but after political pressure from both Germany and the UK, decided on a course of strict austerity instead, closing down its Antwerp plant and making 9,000 redundancies.

This new scare comes at a time when Vauxhall is seemingly on the up: the Corsa and Astra both finished in the UK top five best sellers chart for 2011, and although Vauxhall's sales were 5% down overall compared to 2010, the company sold 55,000 more cars than Volkswagen and took a 12% UK market share.

However, GM's European market share across all its brands is dropping - Opel's dipped by 18 percent in December 2011 alone.

A more detailed analysis of how Opel/Vauxhall has reached this point can be found here.
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