GM Production Plant in Azambuja Threatened with Closure

On June 1st, 2006 employee and union representatives from GM production plants throughout Europe met in Lisbon to discuss a common strategy to protest against GM Europe’s planned closure of the production plant in Azambuja.

According to statements by GM company management, the Combo model in Azambuja is at a competitive cost disadvantage of 500 Euros – calculations which employee representatives have emphatically rejected. The figures published are highly unlikely, not least because of the fact that Azambuja has been producing the Combo for the last five years, yet company management have waited till now to criticise the alleged cost disadvantage factor. GM is using this incredible version of the facts for the sole purpose of finding ostensible economic reasons for the planned closure of the production plant in Azambuja. However, the real reasons behind this are the start of GM’s new strategy aimed at closing plants in western Europe and shifting production towards eastern Europe, Korea and China.

Since 2001 GM Europe has invested over 130 million Euros in the Azambuja plant in addition to receiving 41 million Euros in subsidies from the Portuguese government which are binding until 2008. The plant is organised along similar lines to that of Eisenach, regarded as a model in terms of global GM standards. In fact, compared to Eisenach, the work costs in Azambuja are significantly lower.

The employee representatives are of the opinion that a nearby press shop could be used to improve productivity even further in Azambuja and save transportation costs. Improvements in the logistics system would also bring advantages. However, the employee representatives reject the notion of making cuts in the comparatively low wages of the Azambuja workers.

Together with the management, the European employee representatives are prepared to close the narrow productivity gap between the Eisenach plant (85 Corsas per worker p.a.) and the Azambuja plant (72 Combos per worker p.a.) If company management rejects this offer, then works councils and unions would reach the obvious conclusion that GM is unwilling to come to an agreement in this matter and is in reality going ahead with plans to shift jobs away from the West towards the East.

The European employee representatives are concerned at the loss of image which GM and the brands in question will suffer, should this course of action be pursued without regard for the employees and their families affected by the situation.

Klaus Franz, the chairman of GM’s European Employee Forum has condemned this strategy and said all European plants will take action in order to save the plant in Azambuja. “Plant closures are always the result of management’s inability to plan for the future of the company. We will negotiate with the management about the future of the Azambuja plant and prove we are in a position to put our words into action. The employee representatives will never agree to the closure of the Azambuja plant.”