* No successor models planned for Bochum after Zafira Tourer
* German unions hopes for 2-yr extension in job guarantees
* Opel could shift Mokka, Antara production to Europe
* IG Metall signals openness to delay 4.3 pct wage hike
By Christiaan Hetzner and Ben Klayman
FRANKFURT/DETROIT, June 13 General Motors'
European unit Opel is negotiating a deal with labor
unions to close the Bochum plant after production of the Zafira
Tourer van ends in exchange for guaranteeing German jobs through
Opel's management, the IG Metall trade union and the works
council representatives of the German plants will continue talks
in the coming weeks to reach an agreement over job cuts, a
freeze in wage hikes, building a wider range of models and a
deeper expansion into export markets.
"Opel must structure its business in such a way that it is
also profitable in a difficult market environment," Opel Chief
Executive Karl-Friedrich Stracke said in a statement on
Wednesday. "It would not be responsible were we not to act in
view of a 20 percent decline in the European car market versus
The company said the goal is not just to reduce costs but
"to lower the dependence on imported vehicles and parts."
Investors have been focused on the turnaround at Opel, which
GM opted to keep in 2009 after halting a planned sale. GM has
lost money in Europe the last 12 years, including $747 million
last year, and has said the losses could continue for another
The world's largest automaker has scrambled to cut costs in
the region. In late February it said it would form an alliance
with France's Peugeot Citroen. In May, GM said it
would build the next generation of its Astra compact in Britain
after workers at a plant there agreed to a two-year wage freeze,
intensifying speculation about Bochum's fate.
Wednesday's announcement also included plans to boost sales
through the introduction of new vehicles, something Opel has
previously outlined and a strategy that is needed in the
declining and competitive European market, Citi analyst Itay
"Shutting down a plant or even two is rarely the magic wand
that takes losses up to profitability," said Michaeli, who has a
"buy" rating on GM's stock.
Reuters reported on Tuesday that GM's board of directors was
expected to decide on the closure of the Bochum plant as part of
a business plan through 2016 that will be presented to Opel's
labor leadership on June 28. GM Chief Executive Dan Akerson said
during the company's annual shareholders meeting that actions to
fix Europe would include "removing capacity when and where we
Under the compromise outlined Wednesday, GM and Opel would
be able to reduce the company's fixed cost base by letting
Bochum wind down its production when the Zafira Tourer's life
cycle ends, generally expected for the end of 2016.
While this would cost the jobs of 3,300 people employed at
Bochum, management had relinquished considerations of ceasing
production in 2015 when a current labor deal expires that
protects the 20,000-odd German workers at Opel's three car
plants and one component plant.
As part of the talks, IG Metall is prepared to discuss "a
delay in the implementation" of the recent collective wage
bargaining deal, which foresees hiking pay by 4.3 percent over a
13 month period retroactively from May.
The sides did not say how long such a delay would last and a
GM spokesman said that period has not been established. Michaeli
suggested the triggers to end the salary freeze could be based
on Opel profits and sales.
In agreeing to step outside the industry deal, labor hopes
the talks would allow job guarantees to be extended another two
years through the end of 2016.
Opel reaffirmed plans to run all of its European plants in
three-shift operation at full capacity. Company sources have
confirmed that the company's cost base would ideally require it
to build 500,000 more cars than it manufactured last year.
The carmaker pledged to look into shifting overseas
production back to Europe, including making non-Opel vehicles in
the region. Opel currently imports the Antara sports utility
vehicle from Korea, which will also begin exporting the smaller
Mokka subcompact SUV to Europe come October.
German labor leaders have expressed a desire to shift
production from Korea to Europe, which Korean union leaders have
vowed to block. GM declined to say whether it has opened talks
with Korean union workers over such a move, but the head of GM
Korea said last month there were no such plans.
The higher output in the remaining European factories would
mean roughly half of the planned investments through 2016 would
be made in Germany, home to just over half of Opel's workforce
of more than 40,000 people.
"Opel remains a central pillar of our global business, and I
am absolutely convinced that we are on the right path," said GM
Vice Chairman Stephen Girsky, who leads Opel's board.
Wolfgang Schaefer-Klug, Opel's top Labour leader since
January, expressed support for the deal but said "many points
still must be negotiated." He called the agreement against job
cuts through 2016 a "necessary precondition."
IG Metall boss Berthold Huber said the talks based on a
preliminary plan showed both sides were accepting responsibility
for the losses at Opel, which abandoned its plans to achieve
profitability this year amid a severe drop in the market.
"We expect that the management of GM and Opel do not simply
pay lip service to the plans but support them with the necessary
investments," he said.
GM also said on Wednesday that Opel has developed a plan to
be voted on at the June board meeting that includes
"significant" but unquantified investments in Opel's product
portfolio. It also will introduce more vehicles like the Mokka
in new segments, use different sales strategies it did not
outline and boost Opel sales in such markets as Russia, Turkey,
China and Australia.