Chevies from Poland?

General Motors (GM) is in advanced talks with Ukrainian automaker Ukravto on forming a partnership.

"We are talking to them and are making good progress in the talks," GM's spokesperson said. The joint-venture would be about making entry-level-brand Chevrolet cars in Europe, not shifting production of brand models from GM's plants in western Europe. "Any discussions we might be having with the Ukrainian partner in Poland would refer to Chevrolet. We are looking to find a solution for Chevrolet in Europe. This has nothing to do with Opel," the spokesperson said.

According to Automotive News Europe industry paper, the joint venture would build the Chevrolet Aveo small car in Poland. It said output would start at around 25,000 units by the year's end, but could rise quickly. The car would be produced at Warsaw's FSO plant, which is owned by Avtozaz - Ukravto's manufacturing unit. The launching of production in Warsaw is likely, considering that GM and Ukravto already cooperate to make Chevrolets in Ukraine.

GM was importing its Chevrolet models from South Korea, but now it appears to be strengthening its European production. Labor unions in the West are concerned that the manufacturer might want to cut production in western Europe and expand in eastern Europe and Asia to profit from lower costs. Klaus Franz, head of GM Europe's works council, was quoted as saying that building Aveos in Poland could trigger capacity reductions at GM plants in western Europe and one day lead to the firm building Opel Corsas in Eastern Europe. (Reuters)