Opel plans cheap model as Magna mulls cuts

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Opel plans cheap model as Magna mulls cuts

Opel is reportedly planning to build a low-budget version of its Astra to help it rebound, but the carmaker's likely new owner Magna is still considering massive job cuts.


A union official told the daily Rheinische Post on Thursday that the cheap Astra could help turn around the company's fortunes.

The carmaker is planning a new version of the beloved model to be released in 2010, but it also wants to continue building the current version of the Astra and sell it for a bargain price, Rainer Einenkel, the head of the works council at Opel’s Bochum plant, told the newspaper.

“This way, we want to promise buyers a fully mature and proven new car model at a very attractive price,” Einenkel said.

The so-called “Old Astra” would be produced at the Bochum factory and would be a key part of the company’s plan to regain lost market share.

The company’s expected new owner, the Canadian auto parts company Magna, also plans to build a new version of Opel’s Zafira model in Bochum starting in 2011, securing jobs at a plant that had long been rumoured to be a target for layoffs, the newspaper reported.

Magna made a successful bid for a major stake in Opel and GM Europea in a sale brokered by the German government in early June. Sberbank, a state-controlled Russian bank, will also take a large position in the new company, along with Opel workers. General Motors will retain a minority holding in Opel. The German government chose the bidders least likely to make major layoffs in Germany, but the deal is still not certain to happen.

Meanwhile, Magna may eliminate more Opel and General Motors Europe jobs than previously reported. According to a report Thursday in daily Die Welt, Magna will cut 11,600 jobs in Europe rather than the 10,000 positions that had first been announced.

The report did not specify how many additional cuts could affect Germany aside from 2,500 layoffs in the current plan. Opel and GM Europe employ about 55,000 workers in Europe with 25,000 based in Germany.

The layoffs would allow Opel to increase utilization of its factories from 56 to 96 percent, the newspaper reported.


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