BRUSSELS - General Motors Europe is trying to boost efficiency at its 75-year-old Antwerp, Belgium, plant by 20 percent - bringing it close to the productivity levels at its Adam Opel factories in Germany.
GM wants to convert the massive Antwerp operation into what it calls a 'breathing' factory, by adding shifts, cutting jobs and improving productivity.
Belgium is one of the most expensive European countries in which to produce cars. On 25 November, Ford signed a three-year agreement with unions on a long-term strategy to modernize and improve efficiency at its Genk plant.
A deal signed with Opel Belgium's unions will result in increased working flexibility and 1,000 job losses, in exchange for investment in the plant of BF5.9 billion ($168 million) and a guarantee of job security for remaining employees.
The agreement takes affect on 1 January.
A third shift will be added on that date, giving Antwerp the flexibility to increase production with demand. Annual production could be increased by as much as 100,000 units to 400,000 cars.
The Antwerp factory is GM's second largest in Europe. It is now concentrating solely on making the Astra after dropping Vectra production in August.
A new seven-hour night shift will be essential to help GM cut Astra waiting lists, which stand at several months. It will also enable Opel Belgium to add a second model in the future - perhaps the Vectra replacement, due after 2001. Antwerp has two assembly lines and each produces about 45 vehicles per hour.
The job losses include 800 of 1,300 temporary positions at the plant. Early retirement will account for the rest of the redundancies, while the remaining 500 temporary workers will be offered permanent contracts.
The factory's 6,700 employees have agreed to extra flexibility in work hours and rules, such as working through vacation days and the two-week Christmas and three-week summer plant shutdowns if demand increases.
Belgian taxes and social benefits are among the highest in Europe. Because of the high cost of producing cars in Belgium, Renault abruptly shut down its factory in nearby Vilvoorde last year, a move that caused a backlash from employees, unions and even the government.
These high costs are what motivated Opel Belgium to nine months of negotiations with its unions, said Eddy Geysen, managing director of Opel Belgium.
'The mindset of all of us is that we need to be one step ahead of the competition,' said Geysen, adding that the uproar in Belgium over Renault pulling out was 'on all our minds' during the talks.
Ford of Europe sought advice from Opel Belgium when tackling a similar problem of productivity at the Genk factory which produces the Ford Mondeo and Transit, Geysen said.