DETROIT - European automotive suppliers are about to get closer to one of their customers.
As part of a massive restructuring in Europe, General Motors is forming a dedicated joint purchasing/engineering project team that will work with suppliers to find ways to improve efficiency and reduce costs.
The development comes at the same time the world's biggest automaker is shedding its Oldsmobile brand, shutting down one of its two Vauxhall car production plants in England and trimming its salaried work force by 10 percent in North America and Europe.
GM President Rick Wagoner said the automaker is not trying to put undue stress on its employees and suppliers, just reacting to economic realities.
'We need to get faster and leaner in the marketplace,' he said. 'We had to get the cards on the table and move ahead.'
For 400 workers at one Vauxhall plastics part supplier, bumper injection molder Peguform UK Ltd., GM's decision to close the Luton, England, plant may be catastrophic.
GM lost $181 million in Europe during the third quarter of 2000 and expects 'a much larger loss' for the fourth quarter.
Unlike DaimlerChrysler, which ordered a 15 percent price cut from American parts makers through 2002, GM is not making any demands for mandatory price cuts from European suppliers, said GM spokesman David Barnas.
'We want input from suppliers so we can respond more quickly,' Wagoner said.
Closing Luton's car assembly plant leaves only one Vauxhall factory in the United Kingdom, at Ellesmere Port.
Charles Young of J.D. Power-LMC in Oxford, England, said Luton is a 'very cumbersome plant to operate. It is on four floors, penned in by an airport and lacks the flexibility to manufacture all body types.'
The announcement also hits British auto workers coping with Ford's announcements that it would shutter its Dagenham, England, factory in 2002, affecting 1,900 employees.
Plastics News correspondent Richard Higgs contributed to this report.