GM decision: Trollhättan loses out to Germany

The chairman of General Motors Europe announced on Friday morning that the prized contract to build a new range of 'mid-class' Saab and Opel vehicles has been awarded to the Rüsselheim plant in Germany.

The decision brings to an end months of speculation and uncertainty around the future of Sweden’s Trollhättan factory, which, with government backing, had fought hard to win the contract.

“Both plants presented compelling business cases but, in the end, the scale for this particular allocation tipped in favor of Rüsselsheim,” said Fritz Henderson, chairman of General Motors Europe.

GM said that the decision to build the new Saab and Opel models was based upon extensive analysis of numerous factors including capacity requirements, labour costs, plant efficiency and flexibility, working-hour models and currency issues.

The company believes that the Rüsselsheim plant will be able to substantially improve its productivity.

However, the announcement also contained good news for the Swedish facility as GM committed to build selected Saab cars there until 2010.

“We are committed to the Saab brand and a competitive operation in Sweden,” said Carl-Peter Forster, president of General Motors Europe.

“The 9-3 and 9-5 will continue to be core products for the Saab brand, and will be renewed. Furthermore, we will make every attempt to allocate additional future products to this facility.”

Earlier this week GM revealed that the new Cadillac BLS is to be built in Trollhättan.

The chairman of the Saab chapter of the Metall union, Paul Åkerlund, told Svenska Dagbladet that this was a positive decision.

“We’re keeping the operation in Sweden and we’re going to be increasing production,” he said.

“For the next five years we’re pretty certain about what’s going to happen. Most car manufacturers don’t know how things are going to be in three years’ time.”

Sources: Svenska Dagbladet, Dagens Nyheter