GM Keeps European Plants

GM said the next generation of its mass-market European small car, the Astra, is to be built starting 2010 at four factories: Bochum in Germany, Gliwice in Poland, Ellesmere Port in England and Trollhattan in Sweden.

The automotive plant in Antwerp, Belgium, which produces some current Astra models, will lose around 1,400 jobs as a result of the decision, GM's European boss Carl-Peter Forster said after talks with labor leaders in Brussels.

Forster said GM Europe needed to remain focused on productivity and efficiency in order to ensure it stays competitive in what he called a very demanding industry.

Modernizing Astra production

The US company, which is struggling to cut costs in its home market, makes Opel, Saab and Vauxhall cars in Europe. It is planning to invest 3.1 billion euros ($3.9 billion) in the new Astra.

German labor leaders said the plant at Bochum could see the number of assembly line employees slashed from 4,900 to 3,200 because of GM's plans to streamline production.

The company wants to cut production time for the new Astra model from 24 hours to 15 hours per car, said Rainer Einenkel, head of the workers council at the Bochum plant.

"We've achieved our principal objective: To prevent factory closures," said Klaus Franz, chairman of the Opel workers council in Germany.

The Antwerp plant would build cars for other GM brands, the labor leader said, but details still needed to be worked out, according to the company.

Keeping up with the market

Last month, Forster warned of impending job cuts and said that "in extreme cases we might be forced to shut down a plant."

This was because productivity at the plants was growing at an annual rate of 3 to 4 percent but the market for cars was stagnating, he said.

GM, which employs 60,000 workers in Europe, has shed more than 12,000 jobs as part of a restructuring program introduced in 2005 to cut losses in its European operations.

Last year Opel recorded a net profit of $227 million -- its first gain in seven years. But the parent company has been hit by a sharp downturn in US sales after failing to predict a consumer swing to smaller, fuel-saving models.

As part of the cost-cutting measures, GM closed its Opel plant at Azambuja in Portugal, cutting 1,100 jobs.