Two Opel factories on the line as GM restructures in Europe | Business| Economy and finance news from a German perspective | DW | 23.03.2012
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Two Opel factories on the line as GM restructures in Europe

According to sources close to the GM management, Opel plants in Bochum and Ellesmere Port face closure as D-Day for a production overhaul draws nearer. The situation is serious, says the Opel work's council.

US auto giant General Motors is planning to shut down one or two factories in Europe to slash overcapacity of an estimated 500,000 vehicles per year, the Wall Street Journal reported Friday.

The New York-based newspaper quoted sources familiar with GM's restructuring plans as saying that Opel's supervisory board was "discussing plant closures" at a meeting next Wednesday - ahead of a GM restructuring plan to be made public "within the next couple of weeks."

In efforts to boost profitability in Europe, Opel's lossmaking factories in Bochum, Germany, and its Vauxhall brand in the UK, were "under threat." GM's European operations, which include Opel and Vauxhall, ran up losses of $750 million (565.2 million euros) in 2011.

An unidentified spokesman for Opel told the DAPD news agency on Friday that the company would not "fuel speculation," adding, however, that "regaining profitability is top priority" for Opel.

Workers worried

Worker representatives at Opel appeared shaken by the news, saying they were "deeply worried" up to 7,000 jobs were on the line at the two plants.

"We are gravely concerned, not only about the factory in Bochum, but about any other Opel plant that is threatened by closure," Opel works' council chief Rainer Einenkel told German public broadcaster WDR Friday.

"If the two factories were to be closed, it would mean the end of the Opel brand," he added.

Industry analyst Ferdinand Dudenhöfer said that the possibility of a closure of the Bochum plant was "very real" now.

"The situation is getting very, very serious there," he told DAPD news agency.

However, Bochum workers had a "grace period" of two years, he said, because a restructuring agreement with unions foresaw job losses of 1,400, but a ban on closing the plant before 2014.

uhe/gb (dapd, AFP, dpa)