Opel to cut 9,500 German jobs

9th December 2004, Comments 0 comments

9 December 2004 , RUESSELSHEIM - US car giant General Motors and workers announced a deal on Thursday to slash payrolls at its red-ink ridden German unit Opel by some 9,500 workers in a bid to cut costs and revamp the company. Opel works council chairman Klaus Franz said that the figure in Germany could go as high as 10,000 - nearly one-third of current job levels - depending on how many workers decided to leave voluntarily under the severance and early retirement packages being offered. "This is the deep

9 December 2004  

RUESSELSHEIM - US car giant General Motors and workers announced a deal on Thursday to slash payrolls at its red-ink ridden German unit Opel by some 9,500 workers in a bid to cut costs and revamp the company.

Opel works council chairman Klaus Franz said that the figure in Germany could go as high as 10,000 - nearly one-third of current job levels - depending on how many workers decided to leave voluntarily under the severance and early retirement packages being offered.

"This is the deepest cut in the post-war period," he told a meeting of several thousand Opel workers at the main plant at Ruesselsheim.

But there would be no plant closures or compulsory redundancies, he said, with GM agreeing to spend some EUR 750 million for the "socially-acceptable" payroll cuts.

"Among the bad solutions - and a reduction of jobs is always a bad solution - this is the best that could be achieved," commented Dietmar Hahn, head of the works council at the Bochum factory.

In a breakdown of the 9,500 job cuts now planned, 5,000 are to be at Ruesselsheim, 3,600 at Bochum, 400 at Kaiserslautern, and 500 at the GM-Fiat joint venture Powertrain. Unaffected by the payroll cut plans is the Opel plant in Eisenach in eastern Germany.

Some 6,500 workers will leave either through a severance payment or employment in so-called "transfer companies" in which they will continue to draw their salaries for a period of time while being given new job training.

The other 3,000 job reductions will affect older employees - now 58 or above - who will be offered part-time positions in outsourced parts of the Opel company.

According to the Opel company's in-house newspaper "Opel-Post", the company had already signed agreements with 2,500 employees for part-time work for older employees. In some cases where workers had been with Opel for 30 years, the severance package could reach as high as EUR 200,000.

Employee representatives and management had been negotiating the reduction since GM in mid-October announced its intention to slash its European workforce by 12,000 in order to cut costs by some EUR 500 million by the year 2006.

Besides Germany, payroll reductions are to be carried out at the company's Vauxhall unit in Britain and at Saab in Sweden.

The European operations have lost some USD three billion (EUR 2.3 billion) in total over the past few years, with Opel not having turned a profit now for five years. Opel is bracing for further losses in the hundreds of millions of euros for 2004.

The Opel works council said that now the battle will concern guarantees for plants and production, as well as jobs, at the Ruesselsheim, Bochum and Kaiserslautern plants beyond the year 2010.

 

DPA

Subject: German news

0 Comments To This Article