Opel threatens to shut down Bochum plant early

A top executive of US auto giant General Motors warned Tuesday that the Bochum plant of loss-making Opel in Germany could be closed two years early if management and unions do not agree a turnaround plan soon. Opel announced in December that it will halt auto production at the Bochum plant in 2016, but pledged to keep it running as a parts distribution centre. Nevertheless, management and unions must "come to an agreement in February," or the plant could be shut down at the end of 2014, GM vice chairman and Opel supervisory board chief Stephen Girsky warned in a letter to Opel's workforce. "If no agreement is reached in our negotiations, we'll keep to our existing site agreement, which expires at the end of 2014," Girsky wrote. "That means Zafira production in Bochum would end and all production activities in Bochum be completely shutdown by January 1, 2015." Opel employs about 3,200 people at the site. The carmaker, which has been making losses for years, is hoping to launch a number of new models over the coming years, and also cut costs in order to steer back to profit. Girsky said the workforce must be prepared to make sacrifices. "All employees must make their contribution," he said. Opel could not, for example, afford any wage increases as long as it was in the red, Girsky argued. But GM would be "ready to support Opel financially, as soon as it is in a position in Germany to be competitive and profitable once again." The situation for the entire European car market "remains catastrophic. That is a difficult basis for the upcoming talks," Girsky said. The market would likely shrink again this year. "It's therefore not only unrealistic, but illusory to believe that the market will recover any time soon and help us out of the current situation," he argued. "We have no time to lose and must lay the foundations for a profitable future," Girsky insisted. The Opel works council and the IG Metall trade union blasted the threat to close sooner as "unacceptable" in a joint statement, calling for Bochum to be maintained as a production site. "GM and Opel must make a clear commitment to the future of Germany as a place for industry and development and tie it in the negotiations to a clear future for jobs, just as other automakers have," they said. "Without this, the Opel brand will have no future." They said Opel's troubles were unrelated to workers' salaries and could not be solved by freezing wages. GM estimates it stands to lose more than $1.5 billion (1.2 billion euros) on its European operations this year and wants to steer Opel and its British sister brand Vauxhall back to profit by 2015. Opel and Vauxhall are heavily dependent on the European market where industry-wide sales fell by 15 percent in the first nine months of 2012, according to data published by the European automobile makers' association.