Antwerp plant to close due to "tough reality" of shrinking auto market

The Associated Press ~ staff The News
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BRUSSELS, Belgium - General Motor Co.'s Opel unit will cut 8,300 jobs across Europe, including 4,000 in Germany, and close a plant in Antwerp, Belgium - casualties of the "tough reality" of a shrinking European auto market.
Opel head Nick Reilly said Thursday that the Antwerp plant had to go, with the loss of more than 2,300 jobs, because the company needs to shed 20 per cent of its manufacturing capacity. That's because far fewer cars are being sold as a result of the recession.
"We have to take a plant out and unfortunately it's Antwerp," Reilly said at a press conference in Brussels. "It is the tough reality of the current business environment."
The plant, founded in 1924, has already shrunk from employing 7,000 workers at its peak to around a third of that today. It produces the Astra three-door, convertible and station-wagon versions, almost all of them for delivery outside Belgium.
The Belgian government has tried to stave off the Antwerp plant's closure by earlier this year offering the company up to C500 million ($707 million) to upgrade the facilities.
Reilly said the economic crisis means European car markers will likely sell 1.5 million fewer cars this year than in 2009 and 4 million fewer than in 2007.
The GM cutbacks were a hard blow for the 2,600 Opel workers in Antwerp and the automotive supply companies that employ 10,000 workers.
Werner Dillen, a trade union official, said the future "is not bright (but) we had been expecting that news for 12 months."
When General Motors Co. planned to sell its European car making unit to Canada's Magna (TSX:MG.A) and Russia's Sberbank last year, the bidders said they would close Antwerp down. In a surprise move, GM later decided not to sell its European business.
German daily Welt reported Thursday that most of Antwerp's Astra production is to be transferred to the plant in Bochum, citing anonymous sources from the workers' council.
Opel said in 2007 that it would stop making the Astra at Antwerp and would possibly replace it with midsize Chevrolet models or sport utility vehicles - heavy vehicles that now find fewer buyers as cash-for-clunkers programs and cash-strapped customers favour more fuel-efficient cars.

Organizations: Motor Co., General Motors Co., The GM Magna TSX

Geographic location: Antwerp, Belgium, BRUSSELS Europe Germany Canada Russia Bochum

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