GM to end production of Opel′s Astra model in Germany | Business| Economy and finance news from a German perspective | DW | 07.05.2012
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GM to end production of Opel's Astra model in Germany

According to a German newspaper report, the US auto giant is planning to shift production of the popular Astra model out of its Opel plant in Rüsselsheim. The move could spell the end of GM's biggest factory in Germany.

The next model of Opel's popular Astra car would be manufactured entirely at GM's factories in Ellesmere Port, UK, and Gliwice, Poland, the Frankfurter Allgemeine Zeitung (FAZ) wrote on Monday.

Citing unnamed senior labor representatives involved in restructuring talks with GM Vice President Stephen Girsky, the newspaper wrote that the decision would be formally announced in the middle of May and would take effect in 2015.

According to the report, Opel's works council at the Rüsselsheim plant had offered cost-cutting measures, including wage cuts, to the tune of 70 million euros ($90.9 million) to finance investment needed for the new Astra to be produced at the factory.

Insisting on the new model to be produced there, Opel works council chief Wolfgang Schäfer-Klug told the FAZ that closing Astra production at Rüsselsheim would be "devastating."

"This is as if Volkswagen would stop producing its Golf model in Wolfsburg," he added.

Two plants on the line

FAZ also wrote that neither the management of GM, nor that of its Opel subsidiary, was ready for comment claiming that restructuring talks were still continuing.

GM's European operations Vauxhall and Opel are proving the US auto giant's biggest cash drain after running up losses of some $256 million in the first quarter of 2012 alone.

The US automaker has overcapacity of up to 30 percent in Europe, compared with its market share, and recently announced that it was planning to close one or two of its seven factories on the continent.

GM has yet to release specifics about its European restructuring plans, but Chief Financial Officer Dan Ammann told an annual news conference last week that there wasn't going to be a "big bang" solution.

uhe/gb (Reuters, AFP, AP)