GM Europe to axe 1,600 jobs

The struggling European operation of General Motors will cut some 1,600 jobs in a restructuring programme announced earlier this year, the chairman of its German-based Adam Opel AG unit said.

Carl-Peter Forster said that about 1,200 hourly workers and 400 salaried jobs will be cut in 2002 and 2003, with some 500 to 600 of the cuts coming at Opel’s plant in Bochum, Germany.

The cuts would probably be made next summer.

When the restructuring programme was first unveiled in August, Forster said GM would shed "thousands" of jobs in Europe and slash production capacity in an effort to return to profitability by 2003.

GM Europe subsequently pledged not to close any plants in Europe and to reduce its work force without forced layoffs, a promise repeated by Forster last night.

Opel also said that about half the capacity it plans to slash annually - a total of 350,000 vehicles - will probably be cut from plants where the Astra is made, in Bochum and Antwerp, Belgium.

A plant in Eisenach, Germany, that makes both the Astra and the Corsa would only make the Corsa.

The rest of the 350,000 units of capacity will be cut elsewhere at GM Europe.

GM installed Forster in April, charging the former BMW executive with turning around Opel, which has been losing market share for years and criticised by analysts for its staid image compared to rivals such as Volkswagen and Renault.

The company is also planning a thorough renewal of its product line over the next five years.

The German unit is the hub of GM’s European operation - with more than half its sales and a third of its work force - and the centre of its losses.

Opel booked a record loss of £320m in 2000, dragging GM Europe to an overall loss of £178m. Forster’s predecessor, Robert Hendry, resigned in January.