Opel shuts Antwerp factory

THE first shoe has dropped in General Motors’ restructuring of its European operations, with Opel confirming that it will close its 85-year-old Antwerp plant, in Belgium, this year at a cost of 2300 jobs.

A further 6000 jobs are set to go across the Opel-Vauxhall operation as GM strives to pull its European arm out of the red by cutting costs and shedding excess capacity after pulling out of its deal to sell the European operations to a consortium led by parts maker Magna International with Russian bank Sberbank.

The widely anticipated decision to close the Antwerp plant, which makes the Astra, was announced by Opel CEO Nick Reilly who indicated GM had agonised over the decision.

“We fully understand the effect this announcement has on the Antwerp employees and their families and we sympathise with them,” he said.

“Many have been dedicated to the plant over generations and have done an excellent job producing great quality cars.

“The decision to announce this today, was not taken lightly instead, it is the unfortunate result of the current business reality.

“We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations.”

Left: Opel CEO Nick Reilly.

In its statement announcing the closure, GM painted a gloomy picture of the immediate future for the European car market, which it said would continue to decline by a further 1.5 million vehicles this year.

“It is not expected to return anytime soon – if ever – to these peak levels, resulting in significant overcapacity in general and at Opel in particular,” GM said.

“To ensure long-term sustainability for the company, Opel needs to reduce capacity by approximately 20 per cent.

“In view of current capacity utilisation at all European Opel and Vauxhall plants, planned future product portfolio, timing requirements and financial impact, winding down the Antwerp plant would be the most logical approach for the company. If confirmed, production would conclude in the next few months.

“It is expected that the full restructuring plan, when completed, will affect all Opel and Vauxhall production sites and entities through such measures as capacity reductions, job redundancies and labor cost reductions.”

About half of the 8300 jobs to be shed by Opel-Vauxhall are expected to come from Germany where Opel has four plants and a large administration and technical centre at Russelsheim.

Terms of the Antwerp plant closure now have to be negotiated with labour unions. GM has offered to introduce training programs and assistance to find a new investor for the site.

GM has been making cars at Antwerp since 1925 when Chevrolets rolled down the line there. Since then, it has made more than 13 million cars at the factory, building nine per cent of Opel production at its peak.

In 2007, it made almost 200,000 Astras, but the global financial crisis depressed that to fewer than 90,000 last year.

Opel has two other left-hand-drive Astra factories, in Germany and Poland, while Vauxhall makes right-hand-drive Astras at Ellesmere Port, in England.

In a recent letter to Opel-Vauxhall employees, Mr Reilly said he wanted the company to be known as “a leading European manufacturer of high quality, desirable automotive products, based on German engineering” and “respected around the world”.

“To be winners again we need to take bold decisions, but it’s also important to recognise where we don’t lead,” he said.

“We’re missing an entry in the ‘mini’ segment, we don’t have an identified successor for the Combo light van, we’re not leading in hybrids or pure electric vehicles and our traditional powertrains have mixed performance in fuel economy, CO2 and driveability.”

Mr Reilly, who once managed GM Asia Pacific, whose zone included GM Holden, said Vauxhall-Opel would look much more closely at the numbers in future.

“We can’t afford to have any country or any product losing money in the long-term,” he said.

He also indicated that Opel-Vauxhall would more often go its own way on product design, saying the “focus on global platforms and parts sharing had gone too far – and that there needs to be greater respect for local customers’ needs”.

“Our design and engineering people need to ensure there is Opel-Vauxhall DNA in every car we sell,” he said.

“But we should still take maximum advantage of being a member of a leading global automotive family. We’re better for being part of GM and GM is better for having Vauxhall and Opel.”