GM chooses UK for Astra, bad news for Bochum

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GM chooses UK for Astra, bad news for Bochum

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General Motors is to build the next generation of its Astra compact car in Britain creating 700 new jobs.

The decision came after workers at its factory in Ellesmere Port in northwest England overwhelmingly agreed to changes to working conditions including a pay freeze for two years.

That leaves GM’s plant in Bochum, Germany in danger of closure as the company addresses overcapacity in Europe.

The decision is one of the most dramatic so far as Europe’s carmakers look to restructure or consolidate in response to more than four years of falling demand and profits.

Many factories are running at partial capacity – analysts estimate manufacturers have cut some three million cars, or 20 percent, from their production lines – and still producers struggle to sell vehicles.

GM’s European division – Opel and Vauxhall – posted a 590 million euro loss last year.

The UK deal means an extra third production shift will be added at the Vauxhall factory to ensure 24-hour a day running, as well as the introduction of weekend working to guarantee the factory works at full capacity.