FRANKFURT (Reuters) - General Motors (GM.N) division Opel on Friday said it was cutting working hours at two German plants due to lower demand for its Corsa and Insignia models in the wake of Britain’s vote to leave the European Union.
For both vehicles, the UK is the biggest market.
“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, adding that the number of days when shorter working hours apply would depend on the sales volume of the Insignia and the Corsa in the United Kingdom.
“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, General Motors said it may need to cut costs in Europe to offset up to $400 million of potential headwinds triggered by Britain’s Brexit vote, which has seen the value of the pound deteriorate against the euro making components imported from Europe to the U.K. more expensive.
Analysts at LMC Automotive in a report in July said GM was the most likely automaker to cease production in Britain if costs rise at its plants in England.
The Astra, and the Opel Sports Tourer, both built at Ellesmere Port, source their engines from factories in continental Europe.
GM also has a factory in Luton, England where the Vivaro van is made. It also has factories in Zaragoza in Spain, Ruesselsheim and Eisenach in Germany, and Gliwice in Poland.
Reporting by Edward Taylor; Editing by Maria Sheahan