April 23, 2018 / 9:17 AM / a year ago

German region ready to help Opel, but won't be blackmailed: premier

BERLIN (Reuters) - The German state of Thuringia is ready to offer assistance to carmaker Opel in order to keep the region’s Eisenach plant open, state premier Bodo Ramelow told Reuters on Monday.

Opel sign is displayed on the car during the motor show in Riga, Latvia April 6, 2018. REUTERS/Ints Kalnins

The state could help with energy costs and property, he said, but added that it would only lend assistance if wage bargaining parties returned to the negotiating table.

It is unacceptable to use investment decisions to put the state of Thuringia “virtually under threat of blackmail”, Ramelow said.

Of the three states in which Opel produces in Germany, he added: “The three states won’t allow themselves to be divided.”

France’s PSA Group last year paid General Motors $2.6 billion for loss-making Opel and British sister brand Vauxhall and is now seeking to make savings.

Opel needs to cut personnel costs by up to 25 percent to make German sites competitive, Chief Executive Michael Lohscheller told German weekly Bilanz.

Any investment in the German sites is conditional upon them becoming competitive. Opel has no plans to shut down a German factory and will honor existing collective wage bargaining agreements, Lohscheller told the magazine.

In a separate interview with Automobilwoche, Lohscheller said it would not be able to start production of a new model in Germany in the first half of 2018 because there was no settlement with labor representatives about how to make German sites more competitive.

The German carmaker group’s German works council on Monday insisted that Opel management was not honoring their side of the bargain.

“Lohscheller should tell the truth. The tariff agreements are not being adhered to in the product and project plans for factories and engineering,” the companies works council said in a statement on Monday.

Reporting by Hans-Edzard Busemann; Writing by Paul Carrel; Editing by Maria Sheahan/Keith Weir

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