German carmaker blames job cuts on UK's Brexit vote
Opel Group bosses claim that the United Kingdom's decision to leave the EU is the reason it has been forced to slash working hours at two of its factories.
The German carmaker, which builds cars badged as Vauxhalls in the UK, said the cuts would affect employees at its factories in Eisenach and Russelsheim. It isn't certain how severe the cuts will be, saying it will wait to see how badly UK sales are affected.The result of 'Brexit' saw the value of the pound fall, which has made imported cars more expensive and given UK exporters a boost. Foreign-owned manufacturers can expect to see profits hit if they don't raise prices in dealerships, and sales hit if they do.
The Vauxhall Corsa is the second-best selling car in the UK, and the three-door model is built at the Eisenach factory.
'The Brexit situation is an issue for everybody who does business in and with the UK at the moment,' the company said in a statement.
'There will be an impact on our European financial performance if the pound remains at its current level for the rest of the year.'
During campaigning for the referendum earlier in the summer, the Opel Group warned that a decision to leave the EU could cost the company £305 million because of currency exchange rates and reduced demand for its vehicles.
Although it's too early to predict the long-term effects that Brexit will have on the industry, early signs suggest it's not all doom and gloom. Although new car sales for July indicate that 2016's strong start has cooled, new car registrations were up 0.1 per cent over the previous month, while year-to-date sales had risen by 2.8 per cent over the same period in 2015.