Come 2014, General Motors Company (NYSE:GM)’ Opel will down shutters on Bochum plant

Northern, WI 04/18/2013 (usmarketsdaily) - The Opel unit owned by General Motors Company (NYSE:GM) (Closed: $29.27, Down by 0.68%) is sealing plans of closing its Bochum, Germany car-plant by the end of 2014. This decision has been the result of rejection of a wage freeze by its workers and will be the first auto factory shutdown in the country since World War II. In a statement, the Ruesselsheim, Germany-based unit said that the manager’s decision of stalling the production of vehicles on the site had received the approval of the Opel supervisory board.

Turnaround measures
Since 1999, the GM operations in Europe which include Vauxhall, Opel’s sister-brand in the U.K have suffered losses to the tune of $18 billion. The Detroit-based car-maker is determined to undo all its losses by 2015 and break-even. On April 10, the company outlined its plans of investing $5.2 billion (4 billion Euros) primarily to launch 23 models and 13 engines over a period of three years. The European market had been on the downslide for the sixth year in a row and the company is in efforts of a turnaround in this bleak market scenario.

According to the trade group figures that had been released, the first-quarter combined sales in the region for Opel and Vauxhall dipped to 208,994 vehicles by 7.9 percent. There was a 9.7 industry-wide drop in deliveries.

Bochum workers firm on stand
In March, the workers at the Bochum site voted against forgoing pay rises and said that production of the Zafira minivan will be maintained till 2016 end. GM eventually bunched the agreement with the Bochum logistics-center expansion plan. The company said that post 2016, production of parts would replace car manufacture at the site and that 1,200 out of the over 3,000 jobs, would be left untouched. The Opel spokesperson, Ulrich Weber said that these concessions had been rejected and that this particular plan was taken off the company’s agenda. He said that there are no plans of downsizing the logistics center.

In March, the Opel employees at the remaining four German plants acquiesced to the wage-freeze. This was in lieu of a pledge from GM that there would be no mass firing till 2016 end. The company has not announced shutdown plans for any other plant apart from the one at Bochum.

About the Author

Janet Cook, a long-time member of the US Markets Daily, is an Emmy Award-winning general assignment reporter who has covered a variety of subjects from breaking news to investigative features, from stock markets to politics, and from neighborhood small business to global warming. During his many years with US Markets Daily, Janet Cook has covered a wide range of major stories of both local and national interest. Janet Cook is graduate of the University of Minnesota at Minneapolis where he earned his bachelor's degree in journalism.

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