VIENNA – General Motors Europe will build its next-generation Opel Meriva microvan at the General Motors Espana plant near Zaragoza, Spain, where the existing model is made, rather than transfer production to Poland.

Output of the second-generation Meriva is to get under way in 2009.

Zaragosa built 195,900 Merivas last year.

GM Europe last August began the task of identifying potential manufacturing locations for the next-generation Meriva, narrowing the list to plants in Zaragoza and Gliwice, Poland.

GM's Spanish plant assembled 421,600 cars last year, including 225,700 Opel Corsa small cars and 195,900 Opel Merivas.

The General Motors Mfg. Poland Sp. z o.o. facility in Gliwice produced 128,694 vehicles in 2005. It builds the Opel Astra Classic II, Agila and Zafira cars and the Agila-based Suzuki Wagon R+. Its 2005 output includes 2,869 Suzukis.

The Polish plant had been the early favorite to win the work because of its considerably lower production costs. But Spanish unions, fearing a shift of Meriva production to Poland would put 3,000 Zaragoza jobs at risk, agreed after long negotiations to cost-cutting measures, including flexible work schedules.

“Both plants presented competitive business cases,” says GME President Carl-Peter Forster. “On the structural cost side, as well as from a materials cost perspective, Gliwice clearly has an advantage. But the incremental investments, necessary to extend the plant's capacity, became a key factor.”

Forster says GM had sought a deal with "acceptable" realization costs and hailed concessions made by the workers in reaching the agreement that covers staffing levels and wages, which includes pay raises equal to a percentage point below inflation in 2008, 2009 and 2010.

At the same time, GM confirms its commitment to the Gliwice facility.

“We still see the necessity to extend our business in the Eastern European markets,” Forster says. “With the growth of these markets and the competitive cost base, this obviously makes sense going forward. We will certainly look at future possibilities for our facilities there to grow and to reflect the local market's development.”

Both facilities “put their best foot forward,” says Eric Stevens, GME vice president-manufacturing.

“Finally, the business cases were dominated by the investments, which would have been more than double in Gliwice than in our Zaragoza facility,” he says.

Klaus Franz, chairman of GM's European Employee Forum, welcomes the decision in favor of Spain.

However, GM's unions are demanding the next-generation Opel Agila microvan be built along with the Zafira in Gliwice. The unions are clearly against production of the next Agila at the Magyar Suzuki Rt. plant in Esztergom, Hungary.

According to supplier sources, the new Agila is expected to enter production in late 2007.