GM tight-lipped over UK and German plant closure talk

March 29: GM’s Vauxhall/Opel division has made no further comment on speculation that it is considering shifting production from its plants in Ellesmere Port in northwest England and Bochum in western Germany to low-cost countries.

The Opel Supervisory Board met in Rüsselsheim, Germany, on March 28 to discuss the company’s future strategy. It was rumoured that the meeting could presage an announcement over the future of the two car plants, but the statement – issued jointly by GM and employee representatives on the Opel Supervisory Board as well as Opel/Vauxhall management – said that there would be ‘no further announcements at this time’.

The statement also said: ‘All parties in the meeting agreed that Opel/Vauxhall needs to return to profitability and to take action to increase revenues, improve margins and reduce costs. To that extent, the parties are committed to continue the dialogue with each other in order to identify the best possible strategy to improve the company’s financial performance.’

On March 27, Autocar UK reported that an internal company document seen by German magazine Der Spiegel seemed to indicate that GM is considering shifting production away from the UK and Germany in search of cheaper labour costs. The move could signal the end of GM car production in the North West and Bochum, according to the ‘Global Assembly Footprint’ document. According to the article, GM would satisfy up to 80 percent of additional demand in low-cost countries should sales increase. The report suggests Poland, Russia, China, India, Mexico and Brazil could make possible production sites.

The report, said to be presented at a global GM business conference, said the carmaker plans to export an additional 300,000 vehicles to Europe from Mexico, China and Korea by 2016.

Speaking to Reuters about the possible closure of the Bochum site, a spokesman for GM Europe said: “No decision has been made in this regard for Opel’s car production”.

Vice-president and president for GM Europe, Karl-Friedrich Stracke told German newspaper Bild on March 24 that plant closures and job cuts had been ruled out in the short term. But he said there were “no taboos” in GM’s drive for increased profitability.

The comments came after the WAZ media group reported comments from government sources claiming Stracke had informed the German government about plans to close the Bochum plant. Stracke is reported to be meeting unions over the move.

Reuters reported a spokeswoman for Germany’s Economy Ministry said: “We are following the situation closely and we are in contact with the management of Opel". Pointing to Stracke's comments, she said that locations were safe at least until the end of 2014.

Autocar UK