UPDATE 3-European carmakers cut output as credit crisis hits

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By Helen Massy-Beresford and Marilyn Gerlach

PARIS/FRANKFURT, Oct 7 (Reuters) - General Motors (GM.N) and Ford Motor (F.N) will cut output in Europe, the U.S. automakers said on Tuesday, in another sign turmoil on financial markets is ruining consumers' appetite for big-ticket items like cars.

GM has shut its Opel factory at Bochum, which makes Astra and Zafira models as well as axles and gearboxes, for two weeks until Oct. 13, said a spokesman for Opel, the main European unit of GM.

Another German plant in Eisenach, which makes the new Opel Corsa compact, will halt production from Oct. 13 for three weeks, the spokesman said.

"The financial crisis has prompted people to hold on to their money and spend less for cars," the spokesman said, adding there were no plans at Opel for any mandatory redundancies.

Opel is negotiating with labour over scrapping an evening shift at its Spanish plant in Zaragosa for a year, the Opel spokesman said, adding GM planned to cut production in Britain as well.

Ford plans to rein in output at its German plant in Saarlouis and will this month terminate 204 temporary jobs that were supposed to run until the end of the year, a Ford spokesman said.

He did not say how much production would be reduced at the factory that makes Focus, C-Max and Kuga models.

"We are watching the market closely and react very quickly," he said.

The move followed downbeat comments at last week's Paris car show by executives casting a wary eye on future demand.

"Certainly in the first half (of 2009) it's going to be weak," GM Chief Operating Officer Fritz Henderson said, warning of weakness in both the U.S. and western European markets in the next 12 to 24 months.

Daimler's (DAIGn.DE)'s premium Mercedes-Benz division, BMW (BMWG.DE) and Volkswagen (VOWG.DE) units Seat and Skoda have also been forced to cut output in the face of falling demand.

Carmakers are bracing for tougher times as market sentiment turned sour, with economists chopping their growth forecasts for the euro zone and warning the effects of financial turmoil are swiftly seeping into the manufacturing sector.

Automotive analyst Albrecht Denninghoff of BHF-Bank estimated that demand for cars in Europe would plunge seven to 10 percent in the fourth quarter versus a year ago.

"The surprising thing about this round of production cuts is that it is being done by the premium brands as well," Denninghoff said.