German union bosses approve Opel deal despite split

Wed Mar 27, 2013 11:33am EDT

* Opel can now begin restructuring German operations

* Bochum workers left out of deal after shock rejection

FRANKFURT, March 27 (Reuters) - German trade union IG Metall's federal executive board approved a labour deal with Opel on Wednesday, paving the way for the General Motors unit to begin restructuring its domestic operations.

The final official approval came despite a split in the workforce last week after employees at Bochum, whose vehicle plant was scheduled for closure, overwhelmingly rejected the deal.

"Now that the last formal step is over, we can begin implementing the Deutschland Plan," a spokesman for Opel said.

As part of the deal, Opel aims to reduce its structural costs by a total of $500 million by the middle of the decade, at which time it aims to be profitable.

GM is frantically trying to fix its problems in Europe, where losses last year more than doubled to $1.8 billion, marking the 13th straight year of red ink in Opel's home market.

Under the agreements reached with labour, Opel rules out compulsory layoffs until the end of 2016 at the remaining three German manufacturing plants in Ruesselsheim, Eisenach and Kaiserslautern.

The IG Metall boss for the region including Bochum, Knut Giesler, expressed his regret that roughly three-quarters of the 3,000-strong plant workforce rejected the deal at the recommendation of their labour leader Rainer Einenkel.

As a result, Opel has withdrawn concessions which would have kept some operations going longer, and said it now plans to end transmissions assembly by the end of this year and shut production of Zafira multi-purpose vehicles by the end of 2014.

"No further negotiations on the proposed labour agreement will take place," the Opel spokesman confirmed.

Opel's senior labour leader Wolfgang Schaefer-Klug attacked Weinenkel's stance, saying that no car plant that Opel closed in the past 12 years ever secured such favourable terms.

A labour source close to the talks called Einenkel a "tragic figure" whose conviction he could keep the plant alive ended up backfiring.

"He missed the time point when he had to change his stance and tell his workforce that a closure was inevitable. Instead his entire works council drove down a one-way street at 230 kilometres an hour right into a wall," the person said.

Einenkel was not reachable for a comment.

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