FRANKFURT (Reuters) - Opel, the German unit of U.S. automaker General Motors , agreed with labor representatives to cut the hours of several thousand workers at two of its four German plants in response to a drop in demand for cars in Europe.
The carmaker will halt production for a total of 20 days at its main factory in Ruesselsheim and its component plant in Kaiserslautern between September and the end of the year, it said on Thursday, confirming an earlier report.
GM lost $747 million on its European operations last year as a weak economy hit car sales in the region, forcing it to confront high fixed costs and excess production capacity that equates to 10 plants, it has said.
"The European automobile market is declining dramatically," Opel's head of personnel, Holger Kimmes, said in a statement, adding that flexible working hours were no longer sufficient to offset a decline in utilization.
Opel has 13,800 employees in Ruesselsheim, about half of which will be affected by the agreement, the company said. It is cutting the hours of employees on the production lines as well as in administration.
The Kaiserslautern factory has a workforce of 2,500 people.
Now that it has the approval of the works' council and labor union IG Metall for the plan, Opel can apply for subsidies under the German government's short-work program, called "Kurzarbeit".
The scheme was used by many struggling companies in the 2008-2009 recession, allowing them to preserve jobs by cutting employees' hours when plant usage was low and having the government compensate workers for part of their lost wages.
(Reporting by Maria Sheahan and Peter Dinkloh)
