Boston, MA 09/16/2014 (wallstreetpr) – It seems like bad fortune is not letting General Motors Company (NYSE:GM) go away. Earlier it was vehicle replacement issue that created a buzz around and now its lack of demand in Russia. According to reports, GM is looking forward to cutting production of vehicles at its Opel division in Russia, which will lead to around 500 jobs cut. The main reason behind this job cut is said to be a reduction in local demand due to various Western sanctions and slowing economy.
Management Call:
As per the information given by the management of Opel division of General Motors Company (NYSE:GM), the production at the St. Petersburg plant will be scaled-back to 16 days during three months’ period starting from August to October. The company is aware of the state of people in that area; therefore, it has decided to offer various severance packages to one-fourth of total staff of around 2,000 employees. The company will also put focus on bringing on board local suppliers, which will save time, decrease cost and also helps the weakening economy of Russia.
Why demand has plunged in Russian Market:
Russia has been going through a tough time for last few months. It has forced the Russian people to take control on their buying habits. Due to this fact, the auto sales of General Motors Company (NYSE:GM) have diminished significantly over the past few months time. People don’t have enough money and resources to buy things. On top of that, issue between Russia and U.S. and European nations has made things even worse.
One of the spokesmen of General Motors Company (NYSE:GM) told the reporters that the company was monitoring local market conditions in order to introduce more changes to support local people and Russian economy. All the measures that have been mentioned in various statements by the company will take place immediately.
