Europe

Brexit pushes Opel to cut staff hours in Germany

Opel Insignia production line, Ruesselsheim, 22 Aug 13 Image copyright Getty Images
Image caption The UK is a vital market for Opel Insignia cars

German carmaker Opel plans to cut its workers' hours this year because it expects Brexit to hurt its UK sales.

A spokesman for Opel said about 5,000 workers at its Ruesselsheim and Eisenach factories would be affected. Opel is owned by US car giant GM.

The pound has weakened against the dollar and euro since the UK's 23 June vote to leave the EU, adding costs for firms exporting to the UK.

The UK is the biggest market for Opel's Insignia and Corsa models.

The Opel cars are sold under the Vauxhall brand in the UK.

The spokesman did not specify how many fewer hours Opel staff in Germany would have to work.

In late May the pound sterling was worth $1.46 and €1.3, but now it is worth $1.3 and €1.15.

Brexit impact on GM

GM's European division, which includes Vauxhall in the UK, reported a second quarter profit of $0.1bn, its first profit in five years.

But last month GM warned that cost-cutting was on the cards as the effect of Brexit could cost it up to $400m.

Image copyright AFP
Image caption Brexit has undermined Opel's hopes of returning to profit this year

Most of the Opel cars sold in the UK are imported, even though Vauxhall has factories in the UK.

Another German car giant - Volkswagen - has also introduced short-time working ("Kurzarbeit") at several factories, but not because of Brexit. It has been hit by slow deliveries from some component firms, the German broadcaster ARD says.

The VW Passat factory in Emden cut the hours of more than 7,000 staff on Thursday. Production of Golfs at VW's Wolfsburg hub is likely to be suspended for five days next week.

More than 20,000 workers are likely to see their hours cut, as VW is also looking to slow production at plants in Kassel, Braunschweig and Zwickau.

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