GM says no gear shift to Gliwice

General Motors Corp (GM) will invest EUR 160 (zł.640) million to build a new Meriva model at its Spanish plant in Zaragoza instead of moving production to Poland.

GM executives said wage concessions by Spanish unions and the high investment that would have been needed in Poland had swung the decision in favor of Spain, even though hourly labor costs in Spain are around three-and-a-half times higher than in Poland.

"It is pretty obvious that, on a pure labor-cost basis, the plant in Zaragoza cannot compete with a plant in eastern Europe," said GM's Europe president, Carl-Peter Forster. But the labor concessions had helped cut the gap in manufacturing costs "to a point that it doesn't make sense to move the Meriva to Gliwice," he said.

Klaus Franz, chairman of GM's European Employee Forum, accused the company of playing off workers in the two countries against each other and pushed for the Gliwice plant to produce a replacement for the Agila model alongside the Zafira.

Forster added that GM saw a positive future for its Polish plant and it would play "an important role whenever there is a major new product to be allocated in our European manufacturing network." (Reuters)