GM wants to close factories in Opel

Opel is going from bad to worse in business. After losing €1.5 billion in 2010, in 2011 it closed with a €600 million loss, while it keeps losing market share in Europe, which now stands at just 5.7%.

Since GM is now enjoying an almost unexpected spring, with profits after years without them and after being on the brink of bankruptcy, it now considers it time to try to do something for Opel to sort out its situation. The first move will be to start closing factories in order to have a smaller workforce. It is said that some 4,000 of them are at risk of being laid off; or else GM no longer knows what to do with Opel, or never has.

The layoffs will be carried out gradually, until reaching the closure of the factory, which could happen after 2014. There has also been a rumour that production would be moved to another country with cheaper labour, although this is highly unlikely given the power of the unions in Germany.

The Opel are fine cars, but they don’t sell. And until the brand manages to launch a model that becomes a benchmark (and lowers prices, of course), it will be difficult for it to recover from the dramatic drop in sales it suffered last year.