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Protests to hit GM plants in Germany, Spain

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Link to full article @ Reuters

Protests to hit GM plants in Germany, Spain: source

June 16, 2006

FRANKFURT (Reuters) - Workers angered by General Motors' <GM.N> plan to shut down an assembly plant in Portugal will stage protests starting next week at GM factories in Germany and Spain, a labor source told Reuters on Friday.

"There will be enormous disruptions to production. This could hurt GM," the source said, asking not to be named before a formal announcement on Monday about the industrial action.

He said work stoppages could even jeopardize the launch later this year of the key Opel Corsa subcompact model, which the world's biggest carmaker is counting on to boost sales and income.

Workers at the Azambuja assembly plant in Portugal walked out again on Friday to vent their fury over the carmaker's intention to close their factory.

GM says building Combo delivery vans there costs 500 euros ($633) more per vehicle than at other potential manufacturing sites and told workers on Wednesday it was closing the plant and shifting production to Zaragoza in Spain.

It later suspended the decision at the request of the Portuguese government to give workers one last chance to propose efficiency steps, but GM has stressed how difficult it will be to close a productivity gap of that size.

Labour leaders accuse GM of plucking the 500 euro number from thin air to justify closing the plant as part of a campaign to scale back manufacturing in western Europe and move eastward, where costs are far lower.

The plant about 50 km (30 miles) northeast of Lisbon employs around 1,100 staff.

For Portugal, western Europe's poorest country, losing the factory would be yet another blow in an economy that has been near the bottom of European growth leagues for years.


Seems like the US isn't the only place were labor relations are going south...

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GM Europe said they would wait 5 more weeks until they announce the decision on Azambuja. I pretty sure the plant will close, and others will follow.

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That's the corporate world, smoke and mirrors.

I don't see any of this as an issue of smoke and mirrors. It's a logical business decision.

It doesn't make sense for Azambuja plan to keep operating, becasue it only produces one model, the Corsa-derived Combo, and some of the components are transported from a Spanish plant which builds the Corsa. What makes sense is to consolidate production of different vehicles in each plant, preferably in different segments (Nissan's Sunderland plant in th UK is an excellent example of this). For example, a plant that produces both the Opel Astra and the Opel Vectra can adjust to shifts in demand easily and keep running at or near peak capacity.

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