W Europe fears for car plants as factories shift

Geneva, March 4:

Car plants in western Europe face an uncertain future as production shifts to new factories in low-cost countries in central and eastern Europe and, of course, Asia.

The growing phenomenon, known as ‘footprint migration’, is sweeping through western Europe’s auto industry. Car makers are engaged in a fierce campaign to offset the extra costs of building new cars in western Europe by raising productivity or just moving east.

Plants in the west could fall by the wayside in what industry executives say will be a ‘nasty, brutish and short’ struggle. Executives at the annual motor show in Geneva this week made it plain that the pain of restructuring, including thousands of job losses, was far from over and the move to eastern Europe was inexorable.

Bob Lutz, General Motors’ vice-chairman said, “Everybody’s talking footprint migration from high-cost countries in western Europe and North America. Everybody is talking to the unions and trying to shift at least part of the production to eastern countries. You don’t have a prayer of breaking even on a new car unless it’s built in the east.”