PARIS/BERLIN, Aug 31: European auto workers returning from their summer break may not be back on the factory floor for long, as car makers order temporary shutdowns in response to a protracted sales slump.Staff at some PSA Peugeot Citroen, Fiat, Renault and General Motors Opel plants face stoppages of up to three weeks – and their next leave will be no holiday.
While state-funded programmes cover some of their lost pay in France, Italy and Germany, the shutdowns will add to longer-term uncertainty hanging over thousands of auto workers.
“People are quite worried,” said Gerard Lolivier, a Renault worker and Force Ouvriere union official at a plant in Douai, northern France, which is closing for four days in September then cutting production of the Scenic minivan by 25 per cent from October 1.
“We know we’re going to suffer in the short term because the Scenic sales are not up to scratch,” he said.
In Western Europe, the worst hit region, car deliveries are expected to fall by a further 800,000 vehicles this year to 13.6 million, according to consultancy AlixPartners. That is 19 per cent below their 16.8 million peak in 2007.
Compounding the pain, most incumbent mass automakers are losing ground in the shrinking market. They are seeing customers defect to overseas rivals such as South Korea’s Hyundai and Kia.
A buoyant Volkswagen has also defied the 6.3pc market slump with a 0.8pc dip in the first seven months, helped by newer models and competitive pricing.
More Bad News
European registrations will show a bigger overall decline for the full year, Frankfurt-based Metzler Bank analyst Juergen Pieper predicted.
“We’re bracing for more bad news in the second half,” he said. “With no rebound in sight and underlying economic sentiment still weak, it won’t be until 2014 that things may noticeably improve.” Fiat workers preparing to return next week to the Pomigliano factory near Naples were told on Wednesday they would be stood down again within the month for a total of two weeks. Pomigliano makes the Panda mini, one of Fiat’s newest models.
Chief Executive Sergio Marchionne, who last year scrapped a plant in Termini Imerese, Sicily, has warned that another may close unless unions make concessions allowing vehicles to be exported profitably to the US Fiat controls US automaker Chrysler through a 62pc stake.—Reuters