General Motors to close Opel Bochum plant after 2016 image

  • Opel said it aimed to close the Bochum plant after production of the current model of the Zafira Tourer ends in 2016.

After almost 12 years of consecutive losses in Europe, General Motors it is willing to delay layoffs in Germany for at least four years in exchange for the right to close an Opel manufacturing plant at the end of 2016 in what would be the first shuttering of a German auto plant since World War II.

Opel said in a statement Wednesday that it was in “active talks” with employee representatives and unions about new proposals to make more efficient use of its four German factories and turning around the lagging European business.

“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 2007.”

With 380,000 inhabitants, Bochum is Germany’s 16th largest city. Located in the western state of North Rhine-Westphalia, it rarely makes it into nationwide headlines.

“Bochum’s manufacturing costs per vehicle are still the highest in Europe and that’s despite running three shifts at full capacity,” said a source familiar with the matter, citing a figure which its workforce disputes.

On Tuesday, GM Chief Executive Dan Akerson said he is hopeful the company soon will reach a cost-cutting deal with its German labor unions, which would be a key step in the company’s drive to turn around its money-losing European operations.

Mr. Akerson said the auto maker is in “constructive, professional talks” with unions in Germany and other European nations, saying fixing its European operations is the company’s top priority, followed by reducing the auto makers’ outsize pension obligations.

GM closed a smaller plant in Antwerp, Belgium, two years ago and bankrupt former GM unit Saab Automobile was forced to shut down its Trollhättan factory in Sweden last year.
Only four years ago, Finnish mobile phone maker Nokia shut down its facility in the town almost overnight, which meant a sudden loss of 4,000 jobs.

The Detroit-based company posted a first- quarter adjusted operating loss in Europe of $256 million and also had $590 million in writedowns. GM Europe has reported $16.4 billion in losses since 1999.