MADRID -- Opel is considering cutting further investment in its Zaragoza plant in Spain after failing to reach a deal with unions on wages and working conditions.
The move would threaten production of the next Corsa subcompact model at the factory.
PSA Group, which acquired Opel from General Motors last year, says the Zaragoza factory is less competitive than its other two plants in Spain due to higher wages, lower hours and lower flexibility.
Zaragoza has been operating since 1982 and has built the Corsa for decades. It employs around 5,300 people and was running at 80 percent capacity in 2017 when it made 382,250 vehicles.
Corsa production could be moved to another factory if an accord cannot be reached, an Opel Spain spokeswoman said. "There will only be investment if a plant is profitable, but the Opel plant in Spain is at a disadvantage to other PSA factories in Spain," the spokeswoman said on Thursday.
Months of talks with unions aiming to increase the plant's competitiveness had failed to reach a deal, she said.
Besides the Corsa, the Zaragoza factory builds the Crossland X and Mokka cars sold by Opel and the Citroen C3 Aircross, according to Automotive News Europe's car assembly plant map. The Corsa is also built in Eisenach, Germany. Production of the Adam minicar is due to move to Zaragoza from Eisenach next year. Eisenach will then start building the next Mokka X successor.
Zaragoza's regional government said it had called for an urgent meeting with Opel bosses to evaluate the situation.
Through November, European sales of the Corsa fell 11 percent to 220,159, according to data from JATO Dynamics.
As it looks to ways to return Opel and sister brand Vauxhall to profit, PSA is cutting jobs at Vauxhall's Ellesmere Port plant in England, which builds the Astra compact, to improve its competitiveness. PSA CEO Carlos Tavares said in September that PSA factories appear to be more productive than plants operated by Opel/Vauxhall.
Editor's note: An earlier version misstated the Adam's production location.