Vauxhall to lose 500 jobs in European restructuring

GM Europe to cut 8,300 staff and invest €11bn to return to profitability

Vauxhall is cutting more than 500 British jobs as part of a massive restructuring that will slash 8,300 staff from the group's European workforce.

The strategy announced yesterday by GM Europe (GME) chief executive Nick Reilly aims to get the struggling firm to break even by 2011 and in profit by 2012. But to do so it needs to cut 20 per cent of its capacity across Europe.

Although there will be no redundancies at Vauxhall's Ellesmere Port car plant, Mr Reilly confirmed that Luton Vauxhall, which makes the Vivaro van, will lose 369 jobs. Another 154 will go from Vauxhall's UK administration.

GME also confirmed that Vivaro production at Luton under a joint venture with Renault will continue until at least 2013, when the agreement runs out, and the company is investigating new business options for the plant thereafter. Ellesmere Port, which started production of the new Astra last autumn, is on track to return to three shifts by the middle of next year.

In total, the restructuring will strip 8,300 staff from GME's Vauxhall and Opel operations. Around half of the job losses will be in Germany – where the company employs 25,000 – and another significant slug will go with the closure of the group's Antwerp factory, which was announced last month.

The plan is designed to re-align capacity with demand. It was put together after the group's resurrected US parent pulled back from the sale of the European operations at the last minute in November. Along with the reduction in staff, the strategy also includes €11bn (£9.7bn) of investment over the next five years, including €1.25bn from GM in the US. Vauxhall/Opel will launch eight models this year, and another four next, and the group will also focus on developing next-generation propulsion systems.

"I am very confident this strategy will help fulfil our mission to be a leading European manufacturer," Mr Reilly said yesterday. "The combination of adjustment and advancement will put the company back on a solid footing."

To fund the plan, GME needs €3.3bn. The US parent company has already injected some €600m, and GME is now touting its plans – signed off by independent auditors Warth & Klein – around European governments to try to raise another €2.7bn. Lord Mandelson, the Business Secretary, has indicated a general willingness to support Vauxhall. But Germany's influential IG Metall union yesterday rejected the plans and called on Germany not to reject requests for €1.5bn in aid.

GME was piling on the pressure yesterday, stressing hard the economic value of manufacturing operations to host nations. "Manufacturing is at the heard of industry nations like Germany and others in Europe," Mr Reilly said. "It gives them strength to weather the financial storms of the globalised economy." He also warned that a depletion of manufacturing capability results in a "brain drain". "Manufacturing must have and will have a bright future in Europe," Mr Reilly said.

Meanwhile Dutch car maker Spyker, which is buying GM's Saab business, has switched production from Holland to Coventry as part of the loss-making group's moves to scale up production and reduce manufacturing costs.

Start your day with The Independent, sign up for daily news emails
News
Hillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Sport
wimbledonScot will face Ivo Karlovic next
Life and Style
Kissing
life
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test