Opel factory closure to cost more than 550 million euros: sources

FRANKFURT Fri May 16, 2014 11:18am EDT

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FRANKFURT (Reuters) - The closure of General Motors unit Opel's Bochum factory in Germany is set to cost at least 550 million euros ($754.41 million), two sources familiar with the matter said on Friday.

The cost of severance payments and early retirement for the 3,300 employees in Bochum alone will amount to around 550 million euros, these sources said.

The clean-up of the factory site and the transferring of tooling to shift manufacturing of the Zafira van to the Ruesselsheim factory, also in Germany, will come as "on top" expenses, these sources said.

Opel declined comment.

Senior management at Opel has signed off on the 550 million euros restructuring sum, Germany's Frankfurter Allgemeine Zeitung said in its Friday edition.

Opel chief Executive Karl-Thomas Neumann's contract has been extended to March 2018, the paper further said.

In October last year, Dan Ammann, now president of General Motors, said GM will incur "significant" restructuring costs for closing its assembly plant in Bochum by the end of 2014.

Ammann described 2014 as a "transition year" in Europe, in a broader push to bring GM's European operations back to break-even.

In April last year, Opel approved the closure of its factory in Bochum and started negotiating a severance deal for its employees.

The plant closure is part of a company strategy to achieve profitability in 2016 after more than a decade of losses for GM in Europe. ($1 = 0.7291 Euros)

(Reporting by Jan Schwartz, writing by Edward Taylor; Editing by Elaine Hardcastle)

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