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Business

Market Crisis Forces Layoffs at German Carmakers

Germany's Opel has temporarily stopped making cars at two factories that employ more than 6,500 workers. And other car companies announced they were also planning to decrease production in Germany.

Employees at a Ford plant

Ford wants to hold down the number of cars it makes due to plummeting demand

Opel has temporarily suspended production at two plants in Europe after global financial turmoil has decreased the demand for new cars.

Opel confirmed Tuesday, Oct. 7, that it is shutting down production at its Eisenach plant for three weeks.

The company is "feeling the effects of the financial crisis," said Opel spokesman Andreas Kroemer in confirming the temporary closure.

People are "holding on to their money and not ordering cars," Kroemer added.

Opel is a subsidiary of General Motors and is GM's largest European brand.

Layoffs are temporary

The mass-market Bild newspaper on Tuesday said 6,500 workers would be temporarily laid off at facilities in Eisenach and Bochum.

Around 5,000 workers at the Bochum plant were already out of work starting last week, but the company has said production will resume next week.

Some 1,800 employees in Eisenach will temporarily be laid off as of next week.

Opel reportedly wants to make 40,000 fewer vehicles between now and the end of the year. According to Bild, Opel is also looking at whether to suspend work at its Spanish factory as well as two sites in England.

Other carmakers follow suit

Factory employee assembles Opel car

Opel has announced it is suspending work at two German factories

Soon after Opel's announcement, Ford Motor Company said it plans to lay off 204 part-time workers at its Saarlouis plant where Ford produces the Focus, C-Max and Cougar.

Ford spokesman Bernd Meyer told AP that the company wants to curb production in light of the current financial situation, but he would not say how many fewer cars Ford plans to make. The company has said its Cologne plant will continue production without any changes.

German carmaker Daimler announced Tuesday that it will stop production at its largest German facility in Sindelfingen starting in December. Work will end Dec. 17 and will resume in January, spokesman Florian Martens said.

“It’s our general goal to keep vehicle levels low,” Martens told AP.

BMW also announced that it will stop production at its Leipzig plant in eastern Germany for four days near the end of October, affecting 2,800 vehicles.

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