GM reducing hours at German plants amid Brexit impact

Melissa Burden
The Detroit News

General Motors Co. said it will cut production hours at two German factories as it works to mitigate the impact of the Brexit vote in a year the automaker has been working to break even in Europe for the first time in more than 15 years.

The automaker in a statement Monday confirmed it will use “short time” or reduced hours at its assembly plants in Rüsselsheim and Eisenach “during the course of this year.” On short work days, employees don’t come to work.

“We cannot confirm the exact number of days. This will depend heavily on the sales volume of the Insignia and the Corsa in the U.K. For both vehicles, the U.K. is the biggest market,” GM said in the statement. “The Brexit situation is an issue for everybody who does business in and with the U.K. at the moment and we already announced last month that there will be an impact on our European financial performance if the value of the pound remains at its current level for the rest of the year.”

Opel’s Rüsselsheim plant employs about 4,000 people and builds the Opel/Vauxhall Insignia. The Eisenach plant builds the Opel/Vauxhall Corsa and Adam cars and employs about 1,850.

Last month, GM Chief Financial Officer Chuck Stevens said the United Kingdom’s June vote to leave the European Union could cost the company $400 million in the second half of 2016 primarily due to the weak pound sterling, leaving its goal to break even this year in doubt.

Stevens last month said “everything’s on the table” as it looked to mitigate the impact from the vote that will withdraw the United Kingdom from the European Union.

He said in July that sales in the United Kingdom could fall 5 percent to 10 percent.

Through the first half of 2016, GM had managed a $131 million pre-tax profit in its European region. GM sales in Europe during the first six months of the year are up 4.7 percent to 639,373 vehicles and Opel/Vauxhall sales are up 6.7 percent to 632,550 sales.

(313) 222-2319