Opel labor sees 5.7 billion euro in savings in Europe
FRANKFURT (Reuters) - European labor leaders at GM'S GMGMQ.PK Opel have identified nearly 6 billion euros ($8.4 billion) in wage-related costs that could be saved over the next five years, the head of its works council told Reuters.
The plan could help save the future of Opel's numerous assembly and component plants, a key demand of the 50,000 workers employed throughout Europe, including those in such endangered sites as Antwerp in Belgium or Luton near London.
"At the end of last year the European workforce along with our consultants, Management Engineers, began a process in which task forces had gone through the entire business of General Motors Europe -- at times together with the local management," Works Council Chairman Klaus Franz said in an interview.
"We have identified in Europe a savings potential of 5.676 billion euros in structural costs between the end of 2008 and the end of 2014," he continued, adding he has presented this plan to Opel's frontrunning bidder Magna (MGa.TO).
Labor had originally committed itself to deliver $1.2 billion in structural cost savings to return Opel to profitability by 2011 as part of a deal reached at the end of February with GM's management.
The plan underlines labor's commitment to work constructively with a future Opel investor -- most likely Magna -- unless the Canadian auto parts supplier chooses to bow out of a deal. Beijing Automotive (BAIC) has also bid for Opel.
Moreover, fairly distributing the pain of a restructuring program throughout all European sites in such a way as to avoid closing any one plant could very well meet with approval among competition authorities in Brussels.
"We have held talks already with Industry Commissioner Guenter Verheugen as well as the head of the SPD in the European Parliament, Martin Schulz, and his CDU colleague in order to head off (antitrust) problems," Franz said.
He declined to elaborate on the precise details of the plan such as labor's assumptions on future market share or the exact product allocation among its eight European car plants.
Magna sent a memorandum of understanding to Franz on Wednesday, but he said he will not sign up to a "done deal" and insisted labor must first see a finished business plan from Magna's co-Chief Executive Siegfried Wolf that can be compared with labor's own and then serve as the basis for negotiations.
GLOBALISATION OF BRAND
At a meeting of Opel labor leaders from both individual sites as well as national unions on Thursday, delegations from various countries signaled their willingness to be part of a solution while warning that key questions remained unanswered.
"Our position is quite clear. We have specific issues that are not universal around this table but we cannot move forward until these are resolved," Dave Osborne of UK trade union Unite said during the meeting.
"We still have grave concerns," he continued, citing the unclear future of Luton as well as UK pensions that are a "very important issue" posing a "real obstacle" to a deal.
Antwerp's labor leader Rudi Kennes called on GM and Magna to honor existing agreements that foresee manufacturing SUV versions of the Chevrolet Aveo and Opel Corsa subcompacts in Belgium to be based on the GM's next-generation Gamma platform. Continued...
