GM Europe shifts Belgian SUV output to South Korea

22nd January 2010, Comments 0 comments

GM Europe will shift production on a new line of small SUV cars to South Korea, under the decision to close a major Opel plant in Belgium with the loss of 2,600 jobs.

BRUSSELS - The company's new chief executive Nick Reilly said demand for sports utility vehicles (SUV) of the type it is to manufacture under an un-named brand had "changed significantly" since work first began on pre-production at Antwerp.

"Our projection of how many of those we will manufacture has gone down also," Reilly told a press conference in Brussels after the plant closure, during 2010, was announced to unions.

He said it would be "more economic" to build the cars in Korea.

However, employee and union representatives on the company's European Works Council accused management of illegal action by shifting manufacturing work to Asia.

"By closing Antwerp, GM would breach the contract with the European Works Council on the production of a new small SUV which has not been part of the Opel product portfolio so far," they said in a statement.

Antwerp employees had already been engaged on the product since 2007, with tens of millions of euros already invested there, it added.

"This vehicle -- like the Antara -- is now planned to be delivered to Europe from South Korea," the works council complained.

Up to 5,000 jobs in all would be affected by the knock-on effects of the closure.

The works council said an offer from the devolved Flemish regional government of 500 million euros (some 700 million dollars) in financial assistance had been refused by GM Europe.

A broad restructuring plan is expected to include the elimination of 8,300 jobs from a total of almost 50,000 in Europe -- half of whom are in Germany.

Opel needs 3.3 billion euros (4.7 billion dollars) to finance its plan, and hopes to get 2.7 billion euros from countries where Opel and its British sister brand Vauxhall have operations.


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