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GERMANY: Protests to Hit GM Plants in Germany, Spain

Reuters
June 16th, 2006

Workers angered by General Motors' (GM.N) plan to shut down an assembly plant in Portugal will stage protests starting next week at GM factories in Germany and Spain, a labor source told Reuters on Friday.

``There will be enormous disruptions to production. This could hurt GM,'' the source said, asking not to be named before a formal announcement on Monday about the industrial action.

He said work stoppages could even jeopardize the launch later this year of the key Opel Corsa subcompact model, which the world's biggest carmaker is counting on to boost sales and income.

Workers at the Azambuja assembly plant in Portugal walked out again on Friday to vent their fury over the carmaker's intention to close their factory.

GM says building Combo delivery vans there costs 500 euros ($633) more per vehicle than at other potential manufacturing sites and told workers on Wednesday it was closing the plant and shifting production to Zaragoza in Spain.

It later suspended the decision at the request of the Portuguese government to give workers one last chance to propose efficiency steps, but GM has stressed how difficult it will be to close a productivity gap of that size.

Labour leaders accuse GM of plucking the 500 euro number from thin air to justify closing the plant as part of a campaign to scale back manufacturing in western Europe and move eastward, where costs are far lower.

The plant about 50 km (30 miles) northeast of Lisbon employs around 1,100 staff.

For Portugal, western Europe's poorest country, losing the factory would be yet another blow in an economy that has been near the bottom of European growth leagues for years.





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