Opel could shut Bochum plant two years early

A top executive of US auto giant General Motors has warned 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.

• GM head: Opel in for two troubled years - Business & Money (13 Jan 13)
• Opel cuts car production at Bochum plant - Business & Money (10 Dec 12)
• Bochum Opel plant set to close after 2016 - Business & Money (8 Dec 12)

Opel announced in December that it will halt auto production at Bochum plant in 2016, but pledged to keep it running as a parts distribution centre. About 3,200 people currently work there.

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."

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.

GM estimates it stands to lose more than €1.2 billion 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.

AFP/jcw