BRUSSELS - General Motors Europe is trying to boost efficiency 20 percent at its 75-year-old plant in Antwerp, Belgium. If successful, the plant's productivity would be near the levels of GM Europe's Adam Opel factories in Germany.
GM wants to convert the massive Antwerp operation into what it calls a breathing factory, by adding shifts, cutting jobs and improving productivity.
Belgium is one of the most expensive European countries in which to produce cars. This past November, Ford signed a three-year agreement with its unions on a long-term strategy to modernize and improve efficiency at its Genk plant.
The deal signed with Opel Belgium's unions will result in increased working flexibility and 1,000 fewer jobs in exchange for an investment of 5.9 billion Belgium francs ($172.9 million) in the plant and a guarantee of job security for the remaining employees.
The agreement took effect Jan. 1.
A third shift was added on that date, giving Antwerp the flexibility to increase production with demand. Annual production could be increased by up to 100,000 units to 400,000 vehicles.
The Antwerp factory is GM's second-largest in Europe. It produces only the Astra after dropping Vectra production in August.
A new seven-hour night shift will be essential to help GM cut the Astra waiting list, which stands at several months. It also will enable Opel Belgium to add a second model in the future - perhaps the Vectra replacement, due after 2001. Antwerp has two assembly lines and each produces about 45 vehicles per hour.
The job losses include 800 of 1,300 temporary positions at the plant. Early retirement will account for the other cuts while the remaining 500 temporary workers will be offered permanent contracts.
The factory's 6,700 employees have agreed to extra flexibility in work hours and rules, such as working through vacation days and the two-week Christmas and three-week summer plant shutdowns if demand increases.
Belgian taxes and social benefits are among the highest in Europe. Because of the high cost of producing cars in Belgium, Renault abruptly shut down its factory in nearby Vilvoorde last year, a move that caused a backlash from employees, unions and even the government.
These high costs are what motivated Opel Belgium to nine months of negotiations with its unions, said Eddy Geysen, managing director of Opel Belgium.
'The mindset of all of us is that we need to be one step ahead of the competition,' said Geysen, adding that the uproar in Belgium over Renault pulling out was 'on all our minds' during the talks.