By JANE WARDELL
The Associated Press
Wednesday, May 17, 2006; 10:24 AM
LONDON -- General Motors Corp. said Wednesday it is axing 900 jobs at the British plant of its subsidiary Vauxhall, confirming union fears and renewing a lament for Britain's rapidly disappearing car manufacturing sector.
GM pledged to try to retain a presence in Britain when it announced it was cutting one of three shifts at its Ellesmere Port factory in northern England as it reduces production of its Vauxhall Astra model.
The job cuts follow the collapse last year of MG Rover Group Ltd., Britain's last major auto maker, with the loss of more than 6,000 jobs.
Ford Motor Co.'s Jaguar unit cut 1,000 jobs when it moved its factory in Coventry, central England, to nearby Birmingham, and PSA Peugeot Citroen SA will shed 2,300 jobs when it closes its own plant near Coventry.
"This is a bad news day whatever words are used to try to soften the blow," said Tony Woodley, general secretary of the Transport and General Workers Union. "This plant, our industry and our country cannot afford to keep shedding skills like this."
GM said its decision reflected ongoing pressure in the European car industry to increase productivity and reduce costs.
"Quality and productivity have shown significant improvements, but the issue of long-term competitiveness remains. We need to address this," said Vauxhall Chairman Jon Browning.
"We are putting together a plan to secure, if at all possible, the future of vehicle manufacturing in the U.K.," he said.
Vauxhall is expected to decide next year where it will manufacture its new generation of Astra cars.
British Trade and Industry Secretary Alistair Darling, who traveled to the plant with Treasury Chief Gordon Brown to meet managers Wednesday, said the government would consider a proposal for financial aid for Ellesmere Port to manufacture the new Astra model.
"We cannot make a formal decision on that today, as we have to go through the proper procedure," he said. But it is fair to say that when Vauxhall and unions have come to us with world-class projects in the past, we have responded positively as we would hope to do in the future."
Browning said the company would try to cut the jobs through voluntary retirement.
Carl-Peter Forster, president of General Motors in Europe, said the company had looked for alternatives to job cuts but had found nothing viable.
"This is essential to compensate the higher cost base in Western Europe and to secure the future, given today's competitive environment," he said.
"It is something that works to meet current capacity projections, and not something we expect to see repeated at Ellesmere Port in the current Astra's life cycle, nor is it an indicator of future product allocation decisions," he added.