Opel Adopts Shorter Working Hours as U.K. Demand Weakens After Brexit
August 19 2016 - 9:34AM
Dow Jones News
By Natascha Divac
FRANKFURT--General Motors Co.'s German unit Adam Opel GmbH said
on Friday it would reduce working hours for some of its employees
because of weakening demand for its Corsa and Insignia models in
the aftermath of the Brexit vote.
"There will be short-time work in the plants in Ruesselsheim and
Eisenach during the course of the year," an Opel spokesman said. He
couldn't say how many days employees would work reduced hours.
"This will depend heavily on the sales volume of the Insignia
and the Corsa in the U.K.," he said. The U.K is the company's
biggest market for both vehicles.
Opel has been one of GM's biggest headaches as the German
subsidiary has suffered declining sales and losses for years.
However, the situation has improved recently and last month Opel
reported its first quarterly profit since 2011.
GM said last month it expected a $400 million potential hit in
the second half as a result of Brexit, citing the weakening of the
British pound and slack U.K. demand. The problems could thwart the
company in reaching its goal of returning to the black in Europe on
an annual basis for the first time since 1998.
"The Brexit situation is an issue for everybody who does
business in and with the U.K. at the moment," Opel said on
Friday.
Short-time work is a German scheme used across sectors to
prevent job losses, in which work hours are cut for a limited
period of time. Any corresponding shortfall in pay is partly
compensated by the government.
Germany's Volkswagen AG is also currently using short-time work
due to a supplier dispute that has disrupted some production.
Write to Natascha Divac at natascha.divac@wsj.com
(END) Dow Jones Newswires
August 19, 2016 09:19 ET (13:19 GMT)
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