GM threatens major job cuts at Opel

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GM threatens major job cuts at Opel
Photo: DPA

German carmaker Opel was left to prepare for the worst on Tuesday as its US parent company General Motors announced “horrendous” fourth quarter losses and warned of factory closures at its ailing European unit.


According to a report in the Wall Street Journal, GM is demanding that labour unions make cuts at both Opel and the UK’s Vauxhall, after it emerged that its European businesses had lost $14 billion since 1999.

"There is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough," a GM official told the paper. "If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep."

The automaker lost $580 million in Europe through the first nine months of 2011, and is expected to report even worse losses for the fourth quarter on February 16.

The GM management is reportedly fast losing patience with its beleaguered German subsidiary, and preparing yet another overhaul for Opel that will include major plant closures and job losses.

Negotiations include the possible closure of a factory in the western German town of Bochum, where it employs about 3,100 workers. To offset the job cuts, GM may move some production from South Korea to Germany, the WSJ said. The German unions are expected to resist the cuts.

The carmaker was eager to underline that no deal had yet been made with the German union. "The new management team has a productive relationship with the union and we are both committed to solving the challenges that confront the company together," GM spokesman Selim Bingol said.

The Detroit-based company’s plans to save Opel were stopped dead last year by the eurozone debt crisis leaving it with bigger losses than expected in the last quarter of 2011.

The Local/bk


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