U.K. Plant Expected to Avoid GM’s Axe

General Motors Co. has been widely expected to close its assembly plant in Ellesmere Port, England. But the Financial Times says labor concessions and government incentives have changed GM's mind. The newspaper reports that the carmaker will announce within the week that the facility will remain open.

Analysts had widely expected the Ellesmere facility and an assembly plant in Bochum, Germany, to be closed as part of a restructuring of GM's money-losing Adam Opel unit. They say the German factory is still at risk.

The FT cites anonymous sources who say GM also aims to cut costs at the U.K. operation by sourcing more parts locally. Some of the facility's losses stem from unfavorable exchange rates for components imported from the eurozone, the newspaper says.

GM will add at least 500 jobs at the U.K. plant in 2015, when it is expected to add a third shift to build the next-generation Astra compact car, according to the FT. It says the factory, which currently employs about 2,100 workers, will boost annual output to 200,000 vehicles from 14,000 units now.

Opel labor leaders in Germany said last week that GM has decided to produce the future Astra at Ellesmere Port and a facility in Gliwice, Poland.