GM pledges to keep all German Opel plants open

26th November 2009, Comments 0 comments

GM, after abandoning plans to sell Opel/Vauxhall unit, intends to slash capacity by about 20 percent with the loss of 9,000-9,500 jobs Europe-wide.


Berlin -- A top General Motors executive completed a tour of Opel's four German plants on Wednesday pledging that none would be shut down as the US giant takes the axe to its loss-making unit.

The group's interim head in Europe, Nick Reilly, made the promise at Opel's Eisenach plant after earlier giving similar assurances at Ruesselsheim, Bochum and Kaiserslautern, between them home to 25,000 workers, half the European total.

"We value our Eisenach operations very highly," Reilly said, calling them a "long term resource for Opel."

"It's a highly efficient plant and the people who are working there are very innovative," he said.

GM, after abandoning plans to sell Opel/Vauxhall unit, intends to slash capacity by about 20 percent with the loss of 9,000-9,500 jobs Europe-wide.

Reilly said Wednesday that "50 to 60 percent" of the company's planned 9,000 job cuts at its European unit Opel/Vauxhall would occur in Germany.

"In terms of the specific numbers... it's approximately 50 percent in Germany. That's the suggested number. As I said, we are going to consult, so I'm not giving a final number," Reilly told reporters.

He then added: "I would change that to 50 to 60 percent."

According to the GM website, it employs around 7,000 people in Spain, 2,500 in Belgium and 4,700 in Britain, where Opel cars are sold under the Vauxhall brand.

In addition to around 50,000 employees Europe-wide, GM also has 3,400 workers in Sweden at its Saab unit. A planned sale of Saab to Swedish luxury carmaker Koenigsegg and its Chinese partner BAIC fell through on Tuesday.

Reilly said Opel needs around 3.3 billion euros (5.0 billion dollars) of funding in the coming two years.

GM wants European countries where it also has factories to provide the money, but it said on Monday that it would restructure the auto maker without state help if needed.

German magazine Spiegel said this week that the company had received offers of 400 million euros from Britain and between 300 and 400 million euros from Spain, as well as proposed tax breaks from Poland.

Following talks among top finance ministry officials and GM executives in Brussels on Monday, the European Commission said that nations affected had decided not to make formal commitments before a further meeting on December 4.

Germany came under fire from other European governments for offering 4.5 billion euros in state aid to support GM's original plans to sell Opel, which includes Vauxhall in Britain, to Canada's Magna and Russian lender Sberbank.

Other countries believed that Berlin was offering the money in order to ensure that Germany would be spared large-scale job cuts or plant closures. European regulators were also scrutinising the aid.

GM has since walked away from the deal, which would have seen it sell a majority stake in the company that it has owned for 80 years.

The u-turn angered Germany, with Chancellor Angela staking considerable political capital in the Magna deal.

Berlin demanded that GM repay its 1.5-billion-euro loan, something it has since done. Merkel said that without the loan Opel would gave gone under.


0 Comments To This Article