It 's Official: GM Will Close Portuguese Factory By The End Of The Year

Closing will impact at least 1,200 workers. Automaker says it can produce cars cheaper at other European plants.

LISBON, Portugal (AP) - GM will close its factory in Portugal by the end of the year, with the loss of at least 1,200 jobs, the company's Europe vice president said Tuesday.

GM will transfer the production of its Combo vehicle, produced at the Opel plant at Azambuja, near the Portuguese capital to its factory in Zaragoza, Spain, Eric Stevens told reporters.

''GM Europe has decided to transfer the Combo's production to its Spanish factory,'' Stevens said. ''The transfer will begin in December this year, when the Azambuja factory shuts down,'' he added.

Stevens said the move was not due to production quality problems but rather to high costs and logistical matters that made the factory less competitive.

GM has said that it costs $632 more to make a car at its Portuguese plant than at other European plants.

The decision puts an end to month-long talks with the Portuguese government to try to find a solution that would allow the factory to continue operating in Portugal.

As well as the 1,200 factory workers, GM employs 800 people in administration in Portugal. The company employs 64,500 people across Europe.

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