Autos & Transportation

Stellantis looks at splitting off plants, unions criticise furlough plans

3 minute read

The Opel plant is seen before a staff protest in Thuringia's town of Eisenach, Germany April 24, 2018. REUTERS/Kai Pfaffenbach

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BERLIN, Oct 7 (Reuters) - Stellantis (STLA.MI), owner of Opel, is considering splitting off the German carmaker's largest plant and a second plant, which is shutting down temporarily next week due to chip shortages, a company spokesperson said on Thursday.

The two plants, located in Russelsheim and Eisenach in central Germany, would no longer be part of Opel Automobile GmbH but would remain linked to Stellantis, a company spokesperson said, adding that talks were underway with unions about the potential plan.

"The advantages associated with this more efficient and flexible organisation should contribute to securing jobs in the long-term," the spokesperson told Reuters.

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The news, reported first by German newspaper Handelsblatt, comes after unions expressed concern that the Eisenach plant could be shut down permanently after the company said it would be closed for three months due to the global chip shortage.

Workers at the plant on Thursday accused Stellantis (STLA.MI), of exploiting Germany's furlough scheme to move production out of the country.

Union officials fear that Opel, which is bound by an agreement struck last year not to make any workers in Germany redundant until 2025, is placing workers at the Eisenach plant on furlough as a temporary fix that could evolve into a longer-term shutdown.

Until the shutdown is lifted, the Grandland X model being produced in Eisenach will be made at the company's Sochaux plant in France - but Eisenach workers fear it will be moved there permanently.

"We won't let this be done to us," local workers' council head Uwe Loesche wrote in a statement published on union IG Metall's website on Thursday.

Two unions in France last week issued a similar critique of Stellantis' use of the furlough scheme, alleging that the company was using the chip shortage as an excuse to furlough a disproportionate number of people. read more

"The global automotive industry is in an exceptional situation due to the ongoing pandemic and a global shortage of semiconductors," Stellantis said in an emailed statement to Reuters when asked about the union's concerns.

"Production in Eisenach is scheduled to start again at the beginning of 2022, provided the supply chain situation allows."

Stellantis' Chief Executive Carlos Tavares, alongside other heads of automakers and industry experts, predict the chip crisis will carry on well into 2022. read more

Analysts have said that the company, which is the world's fourth largest carmaker, has an overcapacity problem that could lead to plant shutdowns, though CEO Tavares has promised that his endeavours to turn around Opel's profits would not involve factory closures.

Stellantis, formed through a merger of France's PSA and Fiat Chrysler, has stalled production at plants across France, the United States and Italy in recent months due to the chip crunch, forecasting it would make 1.4 million fewer vehicles this year. read more

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Reporting by Victoria Waldersee, additional reporting by Gilles Gillaume; Editing by Steve Orlofsky, Susan Fenton and Jane Merriman

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