With its sales down 15% for the year and the situation likely to get worse, General Motors’ floundering Opel brand will slash production at two of its key German plants.
Several thousand workers will be idled for at least 20 days through the end of the year, the maker announced after reaching an agreement with its union, the powerful IG Metall. The move is likely the first in a series of steps that Opel will take as it heads towards a broader reorganization being crafted by GM Vice Chairman Steve Girsky, who was named interim chief of European operations earlier in the year.
The European automobile market is declining dramatically,” Opel’s head of personnel, Holger Kimmes, said in a statement explaining the company’s need to slash production.
GM lost $747 million last year on its European operations and Opel was a primary factor in a 40% slide in the maker’s second-quarter 2012 profits. In all, Europe is expected to run up losses of as much as $2 billion for GM for all of 2012.