Opel, the German unit of General Motors said on Tuesday it was cutting the working week for 5,500 employees at its main production site to 30 hours from 35 in a bid to reduce costs and avoid layoffs, Reuters reported.
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The company, which employs around 21,000 people in its home town of Ruesselsheim and is in the middle of a turnaround plan aimed at returning it to profit, said the measures were vital if it is to meet its target of breaking even next year, the report added.
Norbert Kuepper, Opel board member responsible for personnel, told Reuters the company would post a deep operating loss in the third quarter and that the fourth quarter did not look much better.
“We really took a hit in the third quarter,” he reportedly said on the sidelines of a news conference.
Company sources told Reuters Opel, which has been losing money for years, was likely to post a loss in the triple-digit millions of euros this year, despite its cost saving drive, due to persistent weak demand and intense pricing pressure.
Reuters said Opel has suffered from a staid product line-up in a stagnant car market, though it is launching an updated version of its key Astra hatchback, a rival to Volkswagen’s top-selling Golf, which was also relaunched last month.
The company, which builds its Vectra mid-sized car and Signum executive hatchback in Ruesselsheim, cut about 2,500 jobs in 2002 as part of a plan originally intended to see it back in the black by the end of this year, Reuters noted.
An Opel official told Reuters it was not clear how many jobs would be secured by the move or how much money could be saved. The working shorter hours would cut monthly salaries by around €85 on average, while other employees would work three unpaid hours per month out of solidarity, the firm reportedly said.
