MUNICH -- General Motors could close three or more European car plants this year as the cash-starved automaker desperately seeks to align its production with collapsing car sales.
There are at least three plants seriously in question, a person familiar with the matter told Automotive News Europe.
The factories most likely at risk are Antwerp, Belgium; Ellesmere Port, England; and at least one plant in Germany, industry insiders say.
GM aims to reduce its annual costs by between $1 billion and $2 billion (about 778 million to 1.6 billion) in Europe this year to help the company survive the current recession.
The struggling carmaker wants to cut production by a third to adapt operations to a shrinking western European car market. Investment bankers Goldman Sachs project a 2009 sales decline to 10.7 million units from 13.5 million in 2008.
The three closures would be in addition to GMs plan to free itself from Saabs factory in Trollhättan, Sweden. GM plans to spin off Saab into a separate company later this month.
Chris Preuss, GM Europe spokes-man, declined to comment on whether GM is considering plant closures.
We are working through a very difficult situation. We are speaking with labor to come up with a solution. We have nothing to announce at present, he said.
Massive unused capacity
With GM sales falling by 6.5 percent to 2.04 million cars in 2008 in its European markets, which include Turkey and Russia, GMs factories have overcapacity issues. CSM Worldwide said GM could build 2.1 million cars and vans a year in Europe. Last year, it built only 1.5 million units.
Rudi Kennes, GMs European works council vice chairman, said car assembly plant closures would be completely unacceptable.
GM has not yet reported its financial figures for 2008, but in the third quarter its European division had a pretax loss of $1 billion.
GM Europe is attempting to become financially self-sufficient because it can expect no support from its ailing US parent.
On February 17, GM must submit a plan to the US Treasury Department showing it has a viable future. If it fails to do so, it will have to pay back $13.4 billion in loans, which could send its US operations into bankruptcy.
Plans to reduce European production could form part of the submission.
GM is cutting 10,000 white-collar jobs globally this year. Between 3,000 and 4,000 cuts will be in Europe.