GM to invest €50mn in Vienna

Fifty million Euros will be invested in General Motors’ (GM) Powertrain factory in Vienna next year, it has emerged.

Michael Lewald, who has managed the facility since August, told the Kurier today (Weds) the plan was to spend 50 million Euros in investments in 2012 after 70 million Euros this year. “I will ensure that (the GM Powertrain plant in Vienna) will not miss out on any possible investments,” the German businessman – who formerly ran Opel’s factory in Eisenach, Germany – said.

GM’s Powertrain facility is situated in Aspern, a part of Vienna’s Donaustadt district. Engines and gearboxes for various models are manufactured at the plant. Lewald said around one million engines and 600,000 gearboxes would have been produced by the end of this year, 200,000 more than in 2010. “We are in the lucky position to produce not only for Europe but for other world markets as well,” he told the Kurier newspaper.

Speaking about the relationship with Opel’s parental company GM and its influence on operations in Europe, Lewald said: “The factory in Aspern used to be part of the global structure of GM, now it is part of Opel. The only expectation from the USA (from GM) is to be profitable.”

Lewald admitted that the uncertain outlook in the automotive industry could affect sales at GM Powertrain. “Demand for our products will be lower (next year) than this year but higher than in 2010. I expect the Viennese facility to be in the black in 2012.”

Around 273,500 cars were registered in Austria in the first three quarters of this year, up by 8.8 per cent compared to the same time span of 2010. Last year’s record figure of 328,500 car registrations could be surpassed in 2011, according to experts.

Asked whether engines for electric cars (e-cars) would be produced at the GM Powertrain factory in the foreseeable future, Lewald said this depended on how the market for e-cars would develop.

Around 2,200 workers are currently engaged at GM Powertrain. The plant was threatened by closure when GM restructured its European operations in 2009, according to reports. However, the factory’s position was eventually confirmed and strengthened despite GM’s disagreement with Austrian-Canadian car parts maker Magna International about a takeover of its once struggling Opel subsidiary company.

Lewald stressed it was “important” that metal industry representatives and labour unionists came to an agreement about a salary increase for the 165,000 staff of the sector at the negotiating table yesterday. GM Powertrain was one of 200 factories in Austria affected by last week’s labour union summits and strikes. The measures meant that 8,000 less engines than planned were produced at GM Powertrain last week, Lewald explained speaking to the Kurier.

Metal industry workers’ salaries will be increased by 4.2 per cent on average next month, according to industry official Christoph Hinteregger and trade union representative Rainer Wimmer. They explained that staff on low incomes would get more from November. One-off payments are also part of the agreement which formed the outcome of a 14-hour debate.