According to the German automaker, Opel, which is a branch of General Motors (GM), Brexit has in fact impacted negatively on its UK sales.
Opel To Cut Workers' Hours Following Brexit Effect On UK Sales
In a statement, an Opel spokesperson said an estimated 5,000 employees at the Eisenach and Ruesselsheim plants would be affected following impending cuts.
Since Britain’s decision to exit the European Union on June 23, the pound has weakened variously against the euro and the dollar. This has seen an increase in the cost of exporting to the UK.
So far, the UK serves as the largest market for Opel’s signature models—Insignia and Corsa. All Opel cars are marketed and sold via the Vauxhall brand.
The company is yet to announce how many hours its Opel staff in Germany would have to work following the upcoming cuts.
Toward the end of May, the pound sterling was $1.46 against the dollar and €1.3 against the euro. However, that value has now dropped to $1.3 and €1.15.
Big blow to GM
GM’s division in Europe, with the Vauxhall brand being part of it, recorded a $0.1bn profit for the first time in five years.
Last month, the car company announced that it was considering cost cutting as it estimated that Brexit would cost the company as much as $400m.
The large majority of Open cars sold in the UK market are imported in spite of having Vauxhall plants in the UK.
Volkswagen, another German automaker has cut workers’ hours but this is not directly attributed to Brexit. The giant automaker has been hit by a series of slow deliveries from supplies companies, according to reports by ARD in Germany.
Last Thursday, The Volkswagen Passat plant in Emden reduced workers’ hours with over 7,000 staff affected. There are rumors that production at the Golf VW plant in Wolfsburg will be halted for the whole of next week.
It is anticipated over 20,000 workers will have their hours cut as Volkswagen’s production at the Zwickau s, Kassel and Braunschweig plants is set to slow down.