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Opel to stop Astra production in Germany

The Local · 7 May 2012, 12:28

Published: 07 May 2012 12:28 GMT+02:00

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According to the Frankfurter Allgemeine Zeitung, the drastic decision by Opel’s US parent company General Motors is meant to reverse a long sequence of losses. But workers say it could jeopardise the future of Opel’s parent plant.

The Astra hatchback is, along with the Corsa, Opel’s most important model, with an annual production volume of around 330,000.

If plans to remove it from Rüsselsheim go ahead, one unionist said it would be comparable to stopping production of the Golf at a Volkswagen factory.

According to the proposals, from 2015 the Astra would only roll off the production line at Ellesmere Port in England and Gliwice in Poland. The mid-range Insignia saloon would become the sole model produced at Rüsselsheim.

The FAZ says the decision will not be officially announced until mid-May, and a company spokesman told the paper there would be no comment until the conclusion of "ongoing talks." But behind the scenes unionists say that GM vice president Stephen Girsky, president of the Opel board of directors, has made up his mind.

For GM and the Opel management under Karl-Freidrich Stracke, the move is a desperate measure to cut costs.

Since 1999, Opel has cost its parent company $16 billion. The European arm of the US giant, recently described by the GM chief Daniel Akerson as a "building site," is this year set to notch up its sixth consecutive loss.

It is against this backdrop that GM has decided to refocus operations to the UK and Poland, where the workers are cheaper and more flexible.

Their willingness to work 40-hour weeks and up to 80 Saturday overtime shifts a year should allow for the production of an extra 115,000 units a year, according to projections.

But workers at the Rüsselsheim factory insist they can be part of a coherent cost-cutting strategy.

Story continues below…

Their works council, led by Wolfgang Schäfer-Klug, has tabled a last-ditch counterproposal to Girsky, offering to finance the investment that would be needed to produce the new Astras at their plant through pay cuts and other money-saving measures.

It’s not the first time that German Opel workers have been left fearing for their future. In the past three years, GM has slashed 8,000 of its 48,000 European jobs, and in June last year, rumours that the company was to be sold to a Chinese bidder prompted Angela Merkel to call for clarity for Opel’s “hard-working” employees.

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The Local (news@thelocal.de)

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Your comments about this article

15:40 May 7, 2012 by smart2012
This is becoming a trend.. And then hear Germany is booming?????????
16:10 May 7, 2012 by nemo999
It is not a good situation, the strong Euro versus the Pound and Zloty. UK and Poland depressed labor costs, and that an international company will always move production to factories where unit cost are lower, and hence unit profits are higher.

Add to this that there is an estimated 30 to 40 percent over capacity world wide in automobiles production. Net demand for automobiles is falling in the developed world, That the government of China with its deep pockets plan to grab a significant share of the automobile production that survives the shake out. It is not a business to work in or a business to invest money in.

Short of conjuring automobiles out of thin air with little or no production cost I do not see this trend of closing and moving production stopping anytime soon.
16:50 May 7, 2012 by Steve Potts
It was my understanding that the UK factory was more efficient and produced more cars per worker than the German factory. Also, if GM closed the UK factory it would logically mean the end of UK GM car production and it would then not be logic to keep the Vauxhall brand, a brand that has been under GM management in the UK since 1927.
18:19 May 7, 2012 by Beachrider
Opel has been a proud branch of GM since 1929. Deutchland governments have been giving tax breaks and other incentives to VW, MB and others and leaving Opel out of the group.

With the American & Canadian Taxpayers not being joined by European taxpayers in emergency loans to keep these companies afloat, you have to expect that jobs in the USA & Canada will take first priority and other jobs to be done on a profitability basis.

Even with all of that, Opel is much more a German-engineering company that Toyota, Nissan and others. The best outcome is to have Open grow its way out of the divot it finds itself playing-from...
18:25 May 7, 2012 by leuteleute
It really bleed my heart when Germany go on saying they are booming. I can only sleep in peace when Germany will be knock down. At the moment I just troll around look something bad news for Germany.
18:33 May 7, 2012 by Englishted
How long have G.M. had a plant in Poland ?,both the U.K. and Germany built the brand in Europe and now it will be sold out to the East .

When Poland picks up and want more they will move it even further East.

Why the U.K. workers will do anything is simple it is called FEAR introduced by Thatcher and never went away.

Germans would be well advised to stand together with their unions or it could happen here.
23:36 May 7, 2012 by Anth2305
Could this be the same Mrs. Thatcher who actively encouraged Nissan, by offering incentives, to set up vehicle production in the UK? It would also be interesting to know if their employees actually live in 'FEAR', despite the fact that Nissan continues to invest shed loads of money expanding their UK production and employing more workers.

Honda UK are also investing tens of millions on expansion and taking on more workers, they must also have some faith in British workmanship, as they actually export UK manufactured vehicles to Japan.

Most of the past problems associated with British industry in the main simply boils down to bad management, you only have to look at the above companies and the success of others, such as Indian owned Jaguar and Land Rover to appreciate what can be achieved with half decent management.
14:41 May 8, 2012 by Johnne

Why are you so angry at Germany´s booming? anyway I can say I´m a bit confused about all these booming thing as well. My wife´s friend works as an accountant for an American company here in Germany, just last week, the management revealed to them that the whole accounting department is moving to their London branch. So, now? no more work oder was?? schade.
12:26 May 9, 2012 by Kudinghoven
Ah, what a fine car and it would be a shame to end it this way
22:36 May 9, 2012 by Beachrider

The GM plant in Poland is new. It is more profitable than the one in Germany.

Germans have a right to demand that Daimler, VW, BMW and others keep their German plants open because Germany gave tax breaks and incentives to those companies.

German government kissed off Opel in 2008. GM will do its best to make Opel profitable. GM might take a few lumps on North American plants, but other plants must be chosen on a profit-ability basis.
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