General Motors Company (GM)’s Opel to Reduce Workforce by a Third in Europe

The loss-making German unit of General Motors Company (NYSE:GM), Opel, may have to cut 30 percent of its jobs in the country, a German newspaper reported on Saturday.

According to Bild, Opel has been given the target to cut its workforce by a third in the country. Earlier Open had an agreement with its parent to undertake a phased reduction of its workforce.

As part of the cost-cutting strategy, the unit had started by reducing the working hours of several thousands of workers.

Earlier this week the company had entered into an agreement with unions to stop production of vehicles for 20 days at its main German factory in Russelsheim and at a component plant between September and December this year.

A top official at General Motors in Europe however denied the news, the newspaper said.

"There is no such strategy," Steve Girsky, President, GM Europe, told the paper. "It is not true that Opel plans such job cuts in Germany."

Opel also said, "The claim that Opel wants to cut one in every three jobs in Germany is untrue. It is irresponsible to our customers, our dealers and our approximately 40,000 employees. The Bild article damages our brand and puts our business at risk."

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However General Motors' European operations are not in good shape and last year reported losses of $747 million with the slowing down in the Euro zone, where many of the countries are under struggling with acute debt burdens.

Automakers in Europe are feeling the expenses of having more plants than needed and excess production capacities, especially at a time when sales are going down.