Opel blaming ‘Brexit’ for decrease in working hours at two German factories

Britain is still a part of the EU and will be until Article 50 is invoked, but that has done little to stop Opel Group bosses from blaming Brexit for cutting working hours.

The German carmaker, which manufacturers Opels badged as Vauxhalls in the UK, says a reduction in working hours at two of its factories – Eisenach and Russelheim – was necessary in light of Britain voting to leave the European Union and a slip in sales of the Insignia and Corsa.

Opel Group is yet to expand on the exact nature of the cuts, which could affect around 5,000 factory workers, but said demand for the two models will have an impact.

“The Brexit situation is an issue for everybody who does business in and with the UK at the moment. There will be an impact on European financial performance if the pound remains at its current level for the rest of the year,” Opel said in an official statement.

Opel had already warned of the risks of leaving the EU. In the build-up to the referendum outcome, it warned such a move could cost it £305 million because of currency exchange rates and a decrease in demand for vehicles.

The Vauxhall Corsa is currently the second best-selling car in the UK behind the Ford Fiesta, while the Astra is another big seller, which is why Opel Group is seemingly taking a cautious stance while awaiting the outcome of leaving the EU.

Further weakening of the pound could, after all, increase the cost of importing cars, forcing it to raise the price of each car to claw back the costs and in turn make them harder to sell.

Vauxhall Motors is a UK-based subsidiary of the Opel Group, which is wholly owned by America’s General Motors.

Though it is unclear how Britain and Europe will fare as we head toward Brexit, which is looking like it will happen in 2018, new car registrations in 2016 are standing strong compared with 2015.

Cynical onlookers could accuse of Opel of using Brexit as a way of reducing costs it was planning to do anyway, especially as Britain is the Germany’s biggest customer when it comes to cars and keeping things that way makes the most financial sense.