FRANKFURT -- Opel will cut working hours at two German plants due to lower demand for its Corsa and Insignia cars in the wake of the UK's vote to leave the European Union.
"We can confirm that there will be short-time work in the plants in Ruesselsheim and Eisenach during the course of this year," Opel said in a statement today.
The General Motors unit said the number of days when shorter working hours apply would depend on demand for the Insignia midsize sedan and the Corsa subcompact hatchback in the UK. The country is the biggest market for both models, which are sold under the Vauxhall brand.
"The Brexit situation is an issue for everybody who does business in and with the UK at the moment and we already announced last month that there will be an impact on our European financial performance if the value of the pound remains at its current level for the rest of the year," Opel said.
Last month, GM said it may need to cut costs in Europe to offset up to $400 million of potential headwinds triggered by the UK's Brexit vote, which has seen the value of the pound deteriorate against the euro making components imported from Europe to the UK more expensive.
Analysts at LMC Automotive in a report in July said GM was the most likely automaker to cease production in the UK if costs rise at its plants in England.
The Astra, and the Astra Sports Tourer wagon, both built at Ellesmere Port, source their engines from factories in continental Europe.
In addition to Ruesselsheim and Eisenach in Germany, GM also has a factory in Luton, England, where the Vivaro van is made, according to Automotive News Europe's Guide to European Assembly Plants. In mainland Europe it also has factories in Zaragoza in Spain, and Gliwice in Poland.
