GM Portugal Plant Workers Agree To Closing

LISBON, Oct 12, 2006; Reuters reported that General Motors and its workers in Portugal have reached an agreement, after months of talks, on severance terms over the planned December closure of its Azambuja assembly plant in Portugal, GM said on Thursday.

Under the terms, each worker will receive two months' salary for each year worked at the plant, health insurance for two years and education subsidies for children.

The payout of the severance terms depends on the workers producing 23,062 Opel Combo delivery vans at the factory by Dec. 21, GM in Portugal said in a statement. Production of the Combo will be transferred to GM's Zaragoza factory in Spain after that.

The plant's roughly 1,100 workers went on strike last month to protest against the severance terms. GM first announced in May it would close the plant, which was delayed because of opposition from workers.

Closure of the plant is a blow to Portugal, which once had some of the cheapest labour in the European Union but now faces stiff competition from lower-cost countries.