Workers at General Motors' European car plants, including Vauxhall's Ellesmere Port, are bracing themselves for thousands of job cuts next week.
GM executives are to inform union officials on the company's European works council of the scale of the cuts involved, as the world's biggest auto maker implements plans for a 15% capacity cut - equivalent to 350,000 cars a year.
The cuts form the core of GM's Project Olympia, which is intended restore its European operations to profitability. The moves come as fears grow that a combination of economic recession and the terrorist attacks on the US will damage consumer confidence and further depress the car market.
Yesterday Fiat said it would cut output by 30,000 next month, temporarily laying off up to 20,000 workers a week because of a steep drop in European demand.
Toyota, Japan's biggest auto maker, said it expected a 7% slump in its US sales this month. But its president, Fujio Cho, who earlier this year laid out plans to raise US sales to 2.5m a year from 1.7m, said it was too early to assess the full impact of the attacks.
This sentiment was echoed by Germany's two biggest car makers, Volkswagen, which is suspending production at two plants next week, and DaimlerChrysler, which is already shedding 26,000 jobs at its US subsidiary restore profitability.
GM Europe's plans, industry sources said, would see a shift lost at both Antwerp, Belgium, and Bochum, Germany, as capacity is cut by almost 100,000.
As many as 4,000 jobs could go, amid cutbacks in Eisenach, Germany, and Saragossa, Spain. But Ellesmere Port, where Vauxhall is investing £200m, should escape capacity cuts; job losses are, however, expected.
Vauxhall, which refused to comment on the plans, expects to see no significant impact on its UK operations from the terrorist attacks or economic slowdown. MG Rover said its plans remained "on front foot forward" while Ford executives expect at most a 5% decline in Europe next year.
The UK market is on track, said Paul Everitt, head of policy at the Society of Motor Manufacturers and Traders, for sales this year of 2.3m, equal to the record of 1989. This month's sales, boosted by new registration plates, are likely to be up 15% at around 400,000. "Because it's been a strong year we're already anticipating a slower fourth quarter. The question is how much slower."
