GM to axe 10,000 jobs

Thursday, November 05, 2009 - 07:42 AM

General Motors expects to axe around 10,000 jobs across Europe as part of its restructuring of Vauxhall and Opel.

The company said last night that jobs will have to go after the announcement that the car giant had decided to scrap plans to sell the brands to Canadian car parts firm Magna.

Union leaders responded to the latest development by saying redundancies were inevitable but pledged to work towards minimising the impact on Vauxhall's UK workforce.

In a Q&A session with journalists, John Smith, GM's group vice president, said: "Our plans envisaged a headcount reduction of roughly 10,000 people."

But he did not give details as to how this would relate to individual countries or plants.

Tuesday's announcement that Vauxhall and Opel are to be retained by GM was greeted by cautious optimism among some of the 5,500 workers employed by Vauxhall in the UK, mainly at Ellesmere Port and Luton - but it sparked anger in Germany.

Analysts predict that two German plants could now close, with the loss of thousands of jobs, as a result of GM's decision.

Workers across Europe were concerned that Magna's takeover would give an unfair advantage to Opel's vast workforce in Germany, as their government was willing to give loans worth €5bn.

German workers will begin walk-outs today in protest at GM's decision, while the German Government denounced the car giant's behaviour as "totally unacceptable".

UK Business Secretary Lord Mandelson said the decision was a "major U-turn", adding: "I am keen for very early discussions with GM over their plans for the business and how they will affect British plants and workers.

"I have always said that if the right long-term sustainable solution is identified, then the Government would be willing to support this."

Around 2,200 workers are employed at Ellesmere Port, producing the new Astra on two shifts, but Mr Featherstone said he hoped the plant could step up to three shifts.

Guarantees about the future of the van plant at Luton will also be sought.

Unions struck a deal weeks ago with Magna which would have led to hundreds of voluntary redundancies.

Despite announcing the sale to Magna, the deal was never signed, although it was due to be finalised in the coming days.