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Opel workers protest cuts

April 24, 2018

French carmaker PSA has reported a strong sales increase for the first three months of the year after taking over struggling German auto manufacturer Opel. Employees at Opel's sites in Germany fear layoffs.

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Deutschland Kundgebung von Opel-Beschäftigten in Eisenach
Image: picture-alliance/dpa/J.-U. Koch

French automaker PSA announced Tuesday it had sold over a million vehicles in the first quarter of 2018, leading to a revenue jump of 42 percent year on year, with the company's turnover coming in at €18.2 billion ($22.2 billion) for the January-March period.

The Opel-Vauxhall group which PSA took over in mid-2017 accounted for roughly €5 billion of PSA's overall revenue.

In Germany, there's been rising criticism of the PSA management's policy toward Opel, with negotiations on a viable restructuring plan for the Opel sites at Eisenach, Rüsselsheim and Kaiserslautern not having yielded any results yet.

Following a staff meeting at the Eisenach plant in the German state of Thuringia, employees on Tuesday organized a rally in protest at what they say is PSA's unwillingness to stick to earlier pledges concerning the safeguarding of jobs and wages.

Walkout at Eisenach plant 

Hundreds of German Opel workers gathered outside the carmaker's Eisenach plant against PSA's plans to rein in wages in return for new production investments. The protest underlined the deepening dispute between the French carmaker and staff at loss-making Opel, acquired from General Motors last year. The carmaker is already cutting thousands of jobs through voluntary departures. 

More contentious is the company's demand that its 19,000 German workers give up a 4.3 percent pay rise negotiated nationally by the IG Metall union before it commits to a first production investment at Eisenach.

"If there were reasonable negotiations ... then we'd be prepared to talk about reasonable concessions," Opel works council chief Wolfgang Schaefer-Klug told reporters. "What we won't do is to waste our good money on this company only to see a gradual exit from Germany."

PSA boss digs in

The protest, attended by an estimated 1,000 workers, coincided with PSA's annual shareholder meeting, where investors approved Chief Executive Carlos Tavares' 2017 pay — including a €1 million ($1.2 million) bonus for the Opel acquisition. Tavares told shareholders at the meeting near Paris that he was not expecting a swift resolution to the standoff. 

"It's going to take a few more weeks," the CEO said. "Don't be surprised if it makes a bit more noise. This is a part of what needs to be done to get the company back on the rails." Tavares reiterated mid-term goals for Opel-Vauxhall as well as its Peugeot, Citroen and DS brands.

German Chancellor Angela Merkel last week weighed in to demand that Tavares honour commitments to avoid plant closures or forced redundancies that were given before the acquisition. The state premier of Thuringia — the regional state where the Eisenach plant is situated — welcomed Merkel's remarks. 

"I'm very grateful that the Chancellor made clear to the French side that a company in which the French state is involved cannot ignore German labour law," Bodo Ramelow said. The French government, whose bpiFrance sovereign wealth fund owns 12.2 percent of PSA, has so far stayed out of the dispute.

Opel CEO soothes nerves

Opel's new CEO Michael Lohscheller said the company was still willing to invest in its German production sites, including Eisenach, where the Corsa and Adam brands are currently produced.

Lohscheller said that the production of a new SUV could start at the plant as early as the first half of 2019, with a hybrid version of the same SUV to follow as of 2020. He insisted that earlier reports on the planned closure of the Eisenach and Kaiserslautern sites were pure fiction.

What is true, though, is that Opel has been under enormous pressure from parent company PSA to slash its costs drastically and return to profitability.

hg/aos/uhe (dpa, AFP, Reuters)