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GM to slash capacity by 20% in Europe

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GM to slash capacity by 20% in Europe

General Motors said it planned to cut capacity by 20 to 25 per cent and headcount by 9,000 to 10,000 at its European bands Opel and Vauxhall, but denied it would engage in a “bidding war” over jobs with European governments from which it is seeking aid.

Nick Reilly, Opel’s acting chief executive and head of GM’s international operations, said the carmaker hoped to have agreement in principle on loans or guarantees from governments where it has plants within three weeks, and a restructuring plan implemented by the end of this year.

GM is seeking €3.3bn ($4.9bn) to restructure Opel and invest in new products. It says it is willing to provide some of the amount itself, depending on the outcome of its talks on government aid.

Mr Reilly made the remarks after talks on Tuesday on potential loans or guarantees with Peter Mandelson, Britain’s business secretary, and on its restructuring plans with Unite, the trade union.

This week, he held similar talks in Belgium and Poland, where GM also has plants, and will now be visiting Spain

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