Opel union chiefs reject local talks on cuts

Opel union chiefs reject local talks on cuts

Automotive News | March 26, 2012 – 11:43 am EST

FRANKFURT (Reuters) — Union representatives at General Motors’ money-losing European unit Opel/Vauxhall said today they would not engage in plant-by-plant talks on restructuring measures, preferring a Europewide strategy to save factories and jobs.

“We will not negotiate with you on a local level,” European labor representatives said in an open letter to Opel CEO Karl-Friedrich Stracke published today.

People familiar with the company’s thinking told Reuters last week that Opel managers would present a business plan to the supervisory board on Wednesday that might involve closing two plants in Europe to trim capacity by 30 percent. The two plants considered most at risk are in Bochum, Germany, and Ellesmere Port, England.

“Labor forces are gearing up to avoid being played off against one another by management,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen.

Opel CEO Stracke said this month there were “no taboos” in the company’s drive to cut costs, though he would honour an agreement not to shut any sites before the end of 2014.

Opel, based in Ruesselsheim, near Frankfurt, made that agreement with unions in 2010 in exchange for concessions from labor worth 265 million euros ($351 million) a year.

A spokesman for Britain’s Department for Business, Innovation and Skills, asked whether the government had offered incentives to secure the future of the Ellesmere Port plant, said: “They haven’t asked for anything. Obviously we have been talking to them, and we’ve been putting the case about why the UK is a good place to do business and invest here. Other than that, it’s a commercial decision for them.”

GM has grown increasingly impatient with the chronic losses in Europe, including $747 million last year. It has joined forces with France’s PSA/Peugeot-Citroen saying the alliance will lead to $2 billion of annual cost savings.

The two automakers will start work on joint projects by the end of 2012 and have each appointed five executives to a steering committee to oversee and explore areas of cooperation.

In an e-mail to staff last week, Stracke said, “The entire industry is still facing very weak automotive markets in Europe. This is why we have to act now in order to improve profitability on a sustained basis.”

He also said the company would keep a promise to invest 11 billion euros by 2014 and bring 30 new products to market.

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