General Motors Co. will invest EUR250 million ($342 million) to expand its Opel diesel-engine site in Tychy, Poland. GM will upgrade the 530-employee strong Tychy site to get it ready for the production of a new 1.6-liter four-cylinder diesel engine in 2017 for vehicles produced by Opel and Vauxhall, the US carmaker said in a statement.
GM is trying to end by mid-decade its European losses that have reached over $18 billion since 1999. Opel is investing EUR4 billion in the four years through 2016 to develop 23 vehicles and 13 engines. "The new mid-sized diesel engine family is an important part of our engine offensive," Peter Thom, head of manufacturing at Opel, said in the statement.
"We appreciate the good quality and high efficiency of our Polish location and look forward to implementing this exciting project." The Tychy site expansion is "supported" by the Polish Ministry of Economy, GM remarked, allowing it to have annual capacity of 200,000 engines in the near future.
GM decided in December to withdraw Chevrolet brand from Europe, providing Opel more scope to expand and reversing a decade-old sales effort to promote the US brand in the region.
Opel will shutter its Bochum site in Germany by the end of 2014 to cut production costs. Workers at GM's other sites in Europe have agreed to wage concessions in exchange for job security. Opel and Vauxhall still hold a combined market share of 6.7 percent in Europe in 2013, according to the ACEA industry group.