General Motors dropped the axe on its Opel assembly plant in Antwerp on Thursday, shedding 2,600 workers under sweeping cuts to labor and capacity across its European sites.
Facing further losses and dependent on state aid to stay alive, Opel is one of the first European carmakers to take such a drastic step ahead of an estimated drop in market demand this year equal to the output of five manufacturing sites.
"We have to take a plant out and unfortunately it's Antwerp," Opel Chief Executive Nick Reilly told a news conference in the Belgian capital Brussels.
Opel's European works council condemned the closure as a "breach of contract" that would trigger millions in unnecessary costs and withdrew its offer to back Reilly's restructuring plan with 265 million euros in annual wage concessions.
Reilly warned that car sales in western Europe would shrink by 1.5 million in 2010 and be around 4 million units lower than in 2007. The market would not return to this peak level any time soon, if ever, Opel said.
"You have got to face reality. We are losing money and we have to do something about it," he said.
Opel had hinted for weeks that the Belgian plant was in jeopardy as the company moved to chop around 8,300 jobs and cut capacity in Europe by a fifth. Company sources told Reuters on Wednesday the factory was doomed.
Reilly told remaining staff in Europe no other plants were slated to close at present and confirmed that about 4,000 of the 8,300 overall total planned job cuts would come in Germany.
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