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Business

Opel Crisis Plan Faces Opposition from Workers

Car marker Adam Opel looks to be heading for a confrontation with its workforce after it asked for extra sacrifices on pay to help it overcome the financial crisis at its U.S. parent, General Motors.

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Crisis on the horizon

With its latest restructuring measures, loss-making car manufacturer Adam Opel AG looks to be heading for a confrontation with its workforce.

The deputy chairman of the group's works council, Peter Klein, told Handelsblatt that the 36,000-strong workforce would not be prepared to accept the planned wage cuts and cuts in Christmas pay.

Opel plans to cut its workers pay to the minimum levels set down in industry-wide pay agreements. At present, wages are 20 percent above the minimum level, and workers receive a full thirteenth month of salary at Christmas rather than the half month to the industry-wide agreement entitles them.

No more extra sacrifices

But the works council agreements under which the extra pay was secured expired at the end of 2001. According to Klein's estimates, the Opel workforce has through pay restraint already contributed 900 million euro to Opel's restructuring efforts over the past four years.

"The workforce cannot be expected to foot the bill for the restructuring twice over," he reasoned.

Opel Chairman Carl-Peter Forster is asking the workers to make extra sacrifices because the financial difficulties of U.S. parent General Motors have proved to be greater than expected.

Forster officially presents data for full-year 2001 on Wednesday. According to company insiders, Opel's operating loss last year came out at around 670 million euros, the largest in its history. But the insiders add that Opel will post net earnings running into high single-digit millions of euros, owing to the beneficial effects of dividend pay-out from its Opel Bank financing unit.

Opel bought Opel Bank from General Motors with retroactive effect to 1 December 2000. Opel closed 2000 with a loss of almost 460 million euros. Forster, who joined the company from BMW last year, had hoped to bring the company into profit by 2003. But he now faces widespread opposition from the workforce to his new crisis plan.

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