Opel boss hints UK plants safe

News

2 mins read

17 November 2009

New GM Europe chief, Nick Reilly, has hinted that both of the UK’s Vauxhall manufacturing plants are likely to stay open under the company’s new restructuring plan, details of which should be revealed and start to be implemented before the end of the year.

Reilly confirmed that the company needed to shed between 20 and 25 percent of its manufacturing capacity — and up to 10,000 or “three plant’s worth” of its 50,000 jobs — but seemed to suggest that if present plans come to fruition only one European plant would need to shut completely, though most would shed jobs.

Commenting specifically on Luton and Ellesmere Port, he said he believed at this stage there was “a good future for both” - though he added that he still needed final government and union approval for the restructuring plans.

Reilly met journalists immediately following “a good meeting” meeting with the business secretary, Lord Peter Mandelson, who signalled the British government’s willingness to do as much as it could to help. Specific amounts, says Reilly, were neither requested nor offered.

GM Europe needs to raise loans or guarantees to the tune of 3.3 million (£2.9m) across Europe to fund its redundancies and keep investing in the business while the market recovers. Reilly was careful to point out that this was considerably less than the 4.5m euros (£3.9m) sought by Magna, until recently the likely owner of the Opel-Vauxhall business.

Reilly says GM expects another poor sales year in 2010, but believes the European operation could reach the threshold of profitability by 2011, and make “a decent profit” in 2012, based on the range of products it sells now, and total Vauxhall-Opel volume of just under a million vehicles.

A 59-year-old British-born former head of Vauxhall, Reilly was recently given charge of GM’s entire Asia-Pacific portfolio including the booming Chinese market (up 60 per cent this year). But he has taken charge of the GM Europe restructuring following the abrupt departure of former boss Carl-Peter Forster, who quit after the main GM board reached the point of agreeing to sell the business to giant parts supplier Magna International, then withdrew at the last minute.