GM to shed thousands of jobs in European restructuring
Issued on: Modified:
Having scrapped plans to sell its European division Opel/Vauxhall, General Motors says it could cut up to 10,000 jobs as part of plans to slash production in Europe by between 20 and 25 percent.
REUTERS - U.S. carmaker General Motors could cut up to 10,000 jobs as part of its European restructuring plan and hopes to finalise the details within three weeks, a top executive said on Tuesday.
Nick Reilly, interim head of GM's European business, said the company must reduce its production across Europe by between 20 and 25 percent as part of the 3.3 billion euros ($4.9 billion) plan.
The company is prepared to put up some of its own cash to help fund the restructuring, but hopes to receive money from European governments too, he added. The company has about 2 billion euros of its own money to invest in the restructuring.
"We cannot let this situation linger, we need to get on with the restructuring," he told a news conference in London. "We have a likely plan but I would rather not give specifics today."
GM scrapped plans to sell Opel to a group led by Canadian auto parts maker Magna earlier this month, casting further doubt over its European operations and risking a confrontation with unions across Europe.
Reilly, a Briton who is in charge of restructuring Opel until ex-GM Europe boss Carl-Peter Forster is replaced, said the new scheme would be less risky for GM than the Magna deal.
The easing of the global economic crisis would benefit GM in some important markets, although cuts will still have to be made he added.
Pressed about where the axe will fall, Reilly said it was too soon to give details. "It could involve closing a plant. We haven't 100 percent decided," he added. "We have some flexibility to use some of our own money."
GM hopes to continue manufacturing at its UK plants, Ellesmere Port in northwest England and Luton, north of London, he added. Reilly said there may be a chance to "quite significantly" reduce the 800 British job cuts expected under previous plans.
Reilly said he was trying to finalise details of how much money European governments may be prepared to contribute to the restructuring.
The 3.3 billion euros will fund a short-term shake-up and will help meet redundancy payments and investment in the company's product portfolio, he added.
British Business Secretary Peter Mandelson said he didn't think the UK plants would take a particular hit.
"I think one should not over-estimate the job losses involved," he told Sky News. "The final details have yet to be put in place and we will be covering that extremely closely."