GM's losses affect Europe Opel

2013-04-18 15:08

General Motors’ Opel unit solidified plans to close its car plant in Bochum, Germany, at the end of 2014 after workers rejected a wage freeze. It is the first shutdown of an auto factory in the country since World War II.

The Detroit News reported that the Opel supervisory board approved managers' decision on halting vehicle production at the site.


GM's European operations, which also include Opel's UK sister brand Vauxhall, have accumulated the equivalent of about R164-billion in losses since 1999. The Detroit-based automaker has vowed to break even in Europe by 2015, including plans to invest the equivalent of about R47.7-billion mainly to bring out 23 new models and 13 engines in three years.

The company is attempting a turnaround amid a European market that's shrinking for a sixth consecutive year since 2007 . Combined Opel and Vauxhall first-quarter sales in the region declined 7.9% to 208 994 vehicles, according to trade group figures released today (April 18, 2013).

According to the Detroit News, workers at the plant voted in March against forgoing pay raises in exchange for maintaining production until the end of 2016 of the Zafira minivan at the site. GM tied the agreement to a plan to expand a logistics centre at Bochum and replace car-making with parts production after 2016 that would have saved 1200 of the factory's more than 3000 jobs.

Opel spokesman, Ulrich Weber, said the employment-preservation plan is "off the table" after the concessions were rejected. The automaker has no plans to wind down the Bochum logistics center.

Employees at the other four German plants agreed in March to wage freezes in return for GM's pledge to refrain from mass firings until the end of 2016. The carmaker hasn't indicated that it plans to shut any other plant besides Bochum.