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GM to cut 900 jobs in UK plant

General Motors will cut 900 jobs at its plant in northwest England to boost productivity, dealing the latest blow to Britain's car making industry.

india Updated: May 17, 2006 17:39 IST

General Motors will cut 900 jobs at its plant in northwest England to boost productivity, dealing the latest blow to Britain's car making industry.

GM, the world's largest carmaker by volume, said on Wednesday it would axe one of three shifts at its Ellesmere Port plant, affecting about 900 jobs as it seeks to compensate for an expected decline in sales of its Astra compact model.

The move followed unsuccessful negotiations with labour representatives who wanted to share production cuts across other plants in Germany and Belgium that make the ageing Opel/Vauxhall Astra model.

"Our industry simply cannot afford to stop continually improving productivity in its Western European car plants," GM Europe President Carl-Peter Forster, who angered workers after flagging the job cuts last week, said.

The cuts, to take effect later in the summer, follow plans announced by Peugeot Citroen last month to close its central England plant, eliminating 2,300 jobs, and more than 5,000 job losses when British carmaker MG Rover collapsed last year.

Job losses are another headache for British Prime Minister Tony Blair, under pressure following a series of sleaze and mismanagement scandals.

UK Chancellor of the Exchequer Gordon Brown and Trade and Industry Secretary Alistair Darling arrived the plant on Wednesday for talks with the company and workers.

"We want to do everything we can as a government to put this company and the workforce into a position where they win the new model, secure 100 million pounds-plus of investment in this new plant and guarantee, potentially, work for this company for 20 years ahead in this area," Brown told reporters.

Unions and the UK government are expected to press GM to ensure a new-generation Astra will be built in UK, ensuring the future of the Ellesmere Port plant.

GM said it hoped to avoid forced redundancies with a voluntary package. The carmaker said it wanted to retain carmaking operations in the UK but would not guarantee the future of the plant.

"There is still some work we have to do to secure the long-term future," Jon Browning, Chairman of Vauxhall, told reporters.

The European GM Employee Forum said the plan was short-sighted and only solved an expected overcapacity in volume at the plant this year. It said unions at GM's other European plants that make the Astra, GM's top-selling car in Europe, had agreed to share the burden.

GM Europe was already in the process of cutting nearly 12,000 workers to halt chronic losses in the region since 1999.

The job cuts could be a taste of things to come in the car industry given GM's corporate losses, sector-wide overcapacity in Europe and changes in design that make ease of manufacturing a top priority and will eventually require far fewer workers.

First Published: May 17, 2006 17:39 IST