General Motors, the world's biggest car maker, is to cut up to one in five jobs in Europe over the next two years, with most of the cuts to come in Germany, GM Europe said today.
Out of a total European workforce of around 60,000, GM planned to axe 'up to 12,000 jobs over the next two years,' the car maker said in a statement.
'The majority of the job cuts will be made in Germany, with a heavy emphasis on manufacturing and engineering,' the statement added.
The job cuts - around 90% of which would be made next year - were part of GM's plans to cut costs at its loss-making European activities by €500m by 2006.
The measures were needed to address the negative outlook for the European auto market, where demand for new cars was expected to remain sluggish, competition from other car makers - both European and Asian - would likely increase and car prices fall in the coming years, GM Europe said.
The size and timing of the redundancy payments for those employees who lose their jobs had yet to be determined in talks with unions and labour representatives. Those talks would start immediately, GM Europe said.
No details were given as to exactly how many jobs would be axed in at Opel or at GM's other loss-making European subsidiaries, Vauxhall in Britain and Saab in Sweden.
Neither was there any talk of the possible closure of plants, as had been feared in recent weeks. Opel's main factory in Ruesselsheim, near Frankfurt, and the site in Bochum in the heavy-industrialised Ruhr region had been seen as the most likely targets for possible closure.
GM later reported a third-quarter profit of $440m, up 3.5% from a year earlier as gains in its finance activities offset losses from car sales. Overall revenues rose 3% from the same period a year ago to $44.9 billion.
GM also sharply scaled back its profit outlook for the full year, as 'intense competition' was putting pressure on prices. GM's car division posted a loss of $130m, losing money in North America and Europe, while the Asia-Pacific division recorded a reduced profit.
