Thursday, July 20, 2006

Unions slam GM plan to shut Portuguese plant, warn of new strikes

Thursday, July 13, 2006
Unions slam GM plan to shut Portuguese plant, warn of new strikes
Aoife White / Associated Press

BRUSSELS, Belgium -- European trade unions on Thursday condemned General Motors Corp.'s decision to close its Portuguese car plant, warning of new strikes if it does not fulfill obligations to workers.

GM said Tuesday it would close the Azambuja plant on Dec. 31, with the loss of 1,200 jobs, and transfer production of its Opel Combo model to Spain, blaming high costs that made the factory more expensive to run.

Workers in Portugal and Germany walked out of car factories last month in protest after reports that the troubled company might cut jobs in Western Europe and shift production to low-wage economies.

The European Metalworkers' Federation warned of repeat work stoppages at GM's 18 plants unless management helped attract new investors to the site -- which GM has promised to do.

"If GM management is not willing to fulfill its social responsibilities, the metalworkers' trade unions will have to react accordingly," said EMF General Secretary Peter Scherrer.

The European Employee Forum protested that the closure of a "profitable plant" could not be excused, alleging that GM was not reducing overcapacity or restructuring a "crippled" company.

"It is a fundamental change of GM's strategy which plans to close its plants in Europe and to transfer production to low-cost countries," said EEF chairman Klaus Franz.

Both unions said GM had a moral and contractual responsibility toward the region and the Portuguese government, which had sunk 41 million euros ($52 million) into the plant in return for a deal that it would remain open until the end of 2008.

The government said it was surprised to learn of GM's decision to pull out and pledged to take the matter up with EU regulators because much of the funding came from the EU.

GM said it is ready to repay the government "any unearned state aid" and that it would like to work with the government to identify new investors for the site and ensure a smooth transition for the workers.

The carmaker blamed the closure on the extra 500 euro ($632) cost of making each car at the factory compared with other European sites. It said it had already agreed to extend the closing date to December from an original plan to shut down in October.

GM is due to meet EEF after the summer break to talk about a transition plan for workers that would include retraining and other initiatives.

Under a restructuring plan aimed at reducing costs at its European operations, Opel, Saab and Vauxhall, GM already has moved to cut thousands of jobs on the continent, with workers receiving buyouts. The company employs 64,500 people in Europe.

© Copyright 2006 The Detroit News. All rights reserved.


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