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Business

Opel idles production at three German plants

German carmaker Opel has stopped production at its factories in Rüsselsheim and Kaiserslautern. At the Eisenach plant, working hours were reduced in line with company plans to cut overcapacity.

At Opel's main factory in Rüsselsheim, some 3,500 workers were idled under a work stoppage that had been planned for Monday.

In addition, the German carmaker's components' plant in Kaiserslautern completely stopped manufacturing lines on the day, sending its entire workforce of 2,500 employees home.

At Eisenach, early and late shifts were cancelled, Opel spokeswoman Johanna Lomp-Knetsch told journalists in Rüsselsheim on Monday. Night-shift employees have already been working reduced hours since spring of this year.

Lomp-Knetsch said that work at the three plants would be halted Mondays and Fridays over the next three weeks. Work is also scheduled to be halted for the entire final week of September.

"Our aim is to consolidate Opel," Lomp-Knetsch said, adding that further stoppages were planned for October but hadn't been fixed yet.

Opel is trying to match capacity at its four German production sites with demand in the fiercely contested European car markets - the only markets open for the subsidiary of US automaker General Motors (GM) under company policy.

GM sustained a loss of $361 million (294 million euros) from its European operations in the second quarter of 2012, as the unit battles with a 15-percent slump in car sales, notably in crisis-hit eurozone countries.

Last month, Opel's works council and management agreed on short-time work on 20 days throughout the rest of 2012.

Under the scheme, employees see their monthly wages reduced in line with shorter working hours. The shortfall is partially made up by the German state through the Labor Agency.

In the case of Opel, the company will top up reduced wages with an allowance that is said to limit the shortfall to just six percent of normal wages.

uhe/mz (dapd, dpa)