Car manufacturer General Motors is set to slash jobs in its loss-making European division by 12,000.

Workers in Germany will take the biggest hit with 10,000 jobs expected to go at the Opel plants.

Two thousand further jobs cuts will come from GM’s plants in Antwerp, Belgium; Zaragoza, Spain; Trollhättan, Sweden and Ellesmere Port in the UK.

Managerial positions across the plants in Europe will be cut by 15%.

The business hopes to save 500 million euros a year by 2005.

GM Europe Chairman Frederick A. Henderson said: “Improving our competitiveness is the only way to safeguard the future for all our stakeholders. The negotiations were conducted in a fair and constructive manner throughout and the decision to take these inevitable measures was difficult for everyone.

“Both management and employees’ representatives did everything in their power to find solutions that respect our social responsibility for our employees and their families.”

General Motors hopes to avoid compulsory redundancies and has said that agreements are currently being negotiated with workers in the UK and other countries.