Supplementary Memorandum submitted by
Q1. At Q300 a note was offered setting
out in greater detail than in the GME press release the impact
of the decisions announced on 12 December across Europe
A1. On 12 December 2000, GME announced plans
to reduce its installed capacity for vehicle production by more
than 400,000 units between then and 2004. GME would thus expect
to see a reduction in employment levels by 5,000.
Lean manufacturing implementation would
be accelerated at all European plants and capacity utilisation
would continue to be evaluated.
Plans would be introduced to see a salaried
headcount reduction by 10 per cent across Europe.
Cost savings would be sought through various
purchasing initiatives including, amongst others, Covisint (the
new internet trade exchange established between Ford, GM and DC)
and the Fiat alliance in view of joint purchasing and engineering
As a result of these activities, GME expects
to realise savings of over $2 billion (this includes a 12.5 per
cent reduction in fixed costs over three years).
Resume of restructuring impacts within
GME in last 10 years:
reduction of workforce in Antwerp
in 1999 by 1,200 people (18 per cent reduction). At the peak of
employment levels (1996) this plant employed 7,660 people by 2002
it will employ 5,046.
The capacity of this site is being
reduced by from 390,000 to 300,000 the 3 team-2 team shift work
pattern changed to 2 team-2 shift pattern.
Bochum and Russelsheim, Germany
reduction of manufacturing workforce
in Bochum (Germany) in 2000 by 1,000 people (10 per cent). At
its peak this plant employed 13,996 people (1993) and in 2002
it will employ 9,794 people.
Russelheim leanfield implementation
by 2004 will have seen the number of manufacturing employees reduce
from 13,463 (1993) to 6,456 people. The capacity of this site
is being reduced from 470,000 to 270,000.
Closure of Opel's small car assembly
facility in Warsaw in 2000.
Closure of Opel's small car assembly
facility in Hungary in 1998.
Closure of car assembly facility
in Turkey (200 jobs).
Reduction in employees from 8,823
(at its peak in 1995) to 7,550 in 2002. This plant is building
the new Corsa.
Reduction of Luton plant to single
shift until 2002 then closure of plant, 2000 jobs affected.
Establishment of shared services
centre in Barcelona (centralisation of finance staff across Europe).
Establishment of regional sales/marketing
10 per cent reduction in salaried
headcount across Europe.
Q2. Following the exchange at Q 301ff,
it would be helpful to have a note as offered on the enhanced
arrangements offered at (a) Luton (b) a comparable German plant,
preferably Russelsheim and (c) a comparable Belgian plant, preferably
A2 Thank you for sending us the tables which
Ford provided. We concur with the figures that they have provided
you for the legal requirements for (a) Germany (b) Belgium and
(c) the UK. We will follow on from the format they have chosen
to use under Attachment B.
Attachment B: Separation Comparisons
We have provided the Luton plant hourly and
salaried staff with 3 options:
Transfer to IBC Vehicles
Opportunities exist for 1,215 jobs at the IBC.
Transfer to Ellesmere Port plant
A limited number of employees may transfer to
Ellesmere Port but if there are a significant number interested
more jobs may become available as the retirement package will
be offered to employees up there.
A £10,000 relocation package is available.
Special Early Retirement or Separation
For more details please see attached sheetsEmployee
Option Choice Form.
Q3. At Q321 Mr Reilly was asked about a
figure for cancelled contracts. The figures came from a note submitted
by the Luton Vauxhall Partnership, which referred to 600 orders
and 800/1,000 people. This may indedd refer to the contracts for
the now cancelled changeover process. Any clarification would
A3. Vauxhall's purchasing Department are
conducting a continuing, detailed analysis of the impact of the
restructuring announcement on suppliers. At present the analysis
has been completed for the first tier suppliers only, the figures
for the second tier will be available in the next two weeks.
First tier suppliers
The current figures are that if the new Vectra
is not manufactured in the UK 1,453 first tier supplier jobs will
be affected but if it is manufactured in the UK (ie Ellesmere
Port) the figure will fall to 878. Of the 878 job losses approximately
600 would be local to Luton (within a 100 mile radius).
The figure quoted in the Luton Vauxhall Partnership
submission relates to 600 contracts for construction work at the
Luton facility which were cancelled as a result of our restructuring
announcement. The job loss figures listed above includes these
Our Purchasing Department is working closely
with suppliers, governmental agencies and GME purchasing to find
offsetting opportunities to mitigate the impact on our suppliers.
Q4. Clarification of why it is possible
to move the Luton Vectra/Epsilon tooling (Q253) and not the Russelsheim
tooling (Q328) would be useful.
A4. The tooling planned for Russelshiem
was not what was required for the new Vectra/Astra flex plant.
The plant at Russelsheim was not what was required
for the new Vectra/Astra flex plant.
The plant at Russelsheim was to have specific
tooling for the notch back version (saloon), the new generation
wagon (estate) and for the Omega platform.
The other new Vectra plant (previously Luton)
would have had hatch back tooling with notch back flex. Following
the manufacturing restructuring announcement on 12 December 2000
the planning was that another plant (we are hoping it will be
Ellesmere Port) will have the hatch back new Vectra tooling with
notch back flex as well as being a flex plant with the Astra model.
The notch back is the highese volume variant in the UK market.
Q5. Confirmation of the figures at Q364
for the possible scale of flex production of the Epsilon would
Q363 Regarding forcast numbers
for the new Vectra volume at Russelsheim in first couple of yearsDuring
the start up year (2002) it is forecast that 173,000 units will
be built with 254,000 units being built in 2003.
Q364 The plans are that second
new Vectra plant will be tooled up to build 157,800 vehicles a
year whilst during the start up year (2002) the forecast is 100,000.
The Ellesmere Port plant proposals are that there would be capacity
for 45 jobs per hour on two shifts but there would be the potential
for a third shift and/or overtime.
Q6. As noted by the Chairman at the end
of the oral evidence, it would be helpful to know when it was
decided to construct the Vivaro van at Luton; against what competition;
and when it was decided to produce it in Barcelona as well.
A6. The announcement of the agreement between
General Motors and Renault to build the new Vivaro van at IBC
in Luton was made on 19 December 1996. The competition was other
IBC has a volume capacity of 86,000 vans and
is unable to build the high roof variant of the van. We understand
that Renault forecast the need for the extra volume and are thus
considering using another facility to complement the IBC production.
With respect to Renualt's consideration of Nissan's
Barcelona plant we would like to suggest that the Committee contact
Renault or Nissan directly as we understand negotiations are continuing.