IT HAS been another black week for Economy Minister, Manuel Pinho, after the announcement that the American car manufacturer, General Motors (GM), is to close its Opel plant at Azambuja in October.
Long in coming, the US’s largest car company has been suffering from the worldwide economic recession hitting the international car market, forcing it to rationalise its entire European production operations.
GM says that it has lost 10 billion dollars worldwide, as fierce competition has pushed car prices down and driven many producers to countries with cheap, but skilled, labour in the Far East and Eastern Europe.
The decision to pull out of Portugal, with the loss of 1,200 direct jobs, is a further blow to the government’s foreign investment strategy, which only two weeks ago saw the decision of Patrick Monteiro de Barros not to invest in building a state-of-the-art oil refinery at Sines.
Following the announcement by GM, Manuel Pinho said that the government “couldn’t do more than to offer good conditions to companies that wanted to invest in Portugal’s modernisation”.
Apart from closing down the Portuguese factory, GM is also going to shut down units in Spain and the United Kingdom, while in Moscow its European President Carl-Peter Forster signed an agreement with Vladimir Putin to build a new GM factory in Russia.
Last week, the vice-president of GM Europe held talks with Manuel Pinho in Lisbon, but the two didn’t make any comments after the meeting. GM’s spokesman, Nelson Silveira, said that no new statements would be made while discussions with the Portuguese government and union representatives were still ongoing.
For his part, Manuel Pinho limited his comments to saying that the government was continuing its negotiations with GM about the future of the Azambuja factory.
GM opened its factory in Portugal in 1963, and today makes the Opel Combo, which, it says, costs 500 euros more to produce in Portugal than at other factory plants. If the company makes a final decision to pull out – as is expected – the government can insist on a rebate of 30 million euros given to GM in incentives and subsidies.
