GM, Daimler, BMW halt Egypt Production Amid Safety Fears

David Jolley and Finn Ruetten Automotive News Europe

Western automakers including General Motors Co., Daimler AG and BMW AG have shut down production in Egypt amid safety fears for their staff as civil unrest disrupts the country.

GM has halted operations at its plant near Cairo to ensure the safety of its workers and is unable to say when when production will resume.

"All of our employees in Egypt as well as our plant property is safe and secure. Our local team in Cairo is assessing the situation and will decide to commence normal operations once the conditions permit," Johan Willems, a GM international operations spokesman, told Automotive News Europe.

Daimler has stopped production at its Egypt plant and is monitoring the situation, a company spokesman told ANE. The company asked some of its expatriate employees to return home to Germany due to safety concerns, the spokesman said.

BMW also shut down assembly lines in Egypt and is flying two employees and their families out of the country, Dow Jones reported.

Volkswagen AG has stopped vehicle deliveries to Egypt as it was unclear whether these vehicles would reach their destinations, a company spokesman told the news agency.

Nissan Motor Co. said it has closed its factory in Egypt until Feb. 3 following anti-government demonstrations.

“We decided to close our assembly plant in Egypt due to the unstable political situation,” Nissan spokesman Mitsuru Yonekawa told Bloomberg News on Monday. The factory stopped production Sunday, he said.

Nissan has asked four employees at the factory to return to Japan, he added. The plant in Egypt produced 10,000 autos last year, including X-Trail sport-utility vehicles and Sunny compact cars, the company said.

The carmaker sold about 12,000 vehicles in Egypt in that year compared with global sales of about 3.5 million, according to Dow Jones. Nissan plans to make up for the production delay at the factory once the political situation stabilizes, Yonekawa said.

Leoni suffering 'bottlenecks'

Auto parts firm Leoni AG said production in Egypt was suffering some bottlenecks, but said it had sufficient inventory to avoid a complete shutdown, according to a report from Dow Jones.

A Leoni spokesman said the biggest problem had been to ensure workers could get to work. Over the weekend, problems with transportation meant that only around a fifth of employees made it to the plant, a spokesman told ANE.

After rearranging shifts to overcome curfew and transport problems staffing levels have reached around 66 percent, the spokesman said and by increasing shift lengths, production volume is not "significantly down,'' he added. Leoni produces cable wire systems at a plant in Cairo and employs around 4,000 staff there.

Nearly 92,400 cars and commercial vehicles were built in Egypt in 2009, according to statistics from the OICA global auto industry association.