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GM Cuts Production in Europe to Fight Falling Sales
02:11 p.m. EDT, October 07, 2008

Later this month, in a response to the ever slowing sale of new vehicles, General Motors will stop production at all plants in Europe except the facility at Russelsheim.

The move, which will cut production by 40,000 units from the period October 20 to October 31, has angered union leaders who are seeking legal action charging that they were not told informed in advance about the move.

"Workers' delegates do not accept the one-sided approach of the management because such difficult situations can only be solved by working with the employees," said Klaus Franz, chair of GM Europe's employee forum.

The Russelsheim plant will continue operation because it builds the Opel/Vauxhall Insignia, a vehicle just being brought to the market.

In Europe, GM sells brands including Opel, Vauxhall, Saab, and Chevrolet. The move to cut production in the European market is part of a larger trend among car makers who are facing plummeting sales in the face of tight credit and shaky consumer confidence.

In September, the sale of new cars in western Europe reported a 9.2 percent decline to just 1.21 units according to figures compiled by J.D. Power Automotive Forecasting. Predictions are for a fall of 7 to 8 percent overall in 2008.

In a similar move, Volkswagen announced on Monday, October 6 that it would close its Czech factories at the end of the month to cut back its inventory of the Skoda brand.

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