GM may close Belgian Opel plant, cut 5,400 jobs image

General Motors Co. may close its plant in Belgium and cut 5,400 German jobs as the company seeks an accord with workers to restructure its Adam Opel GmbH unit.

The future of the factory in Antwerp and 2,300 workers there is “uncertain,” Nick Reilly, Opel’s acting chief, said today after presenting a reorganization plan to representatives of 50,000 workers. While the unit’s four German sites will remain in operation, 50 percent to 60 percent of the planned 9,000 job cuts will likely impact those facilities, he said.

“We must fight hard to keep our manufacturing operations in Europe viable,” Reilly said at Opel’s base in Ruesselsheim, Germany, which will replace Zurich as GM’s regional headquarters. “Competition is intense and getting fiercer every day.”

GM aims to wring 265 million euros a year in savings from Opel’s workforce before the unit burns through its $2.5 billion in cash, which Reilly has said could happen by the end of the first quarter. The Detroit-based company plans to present union- approved proposals to European governments by the middle of next month in a bid to win aid to reduce capacity by 20 percent.

The U.S. manufacturer, which has owned Opel for 80 years, is prepared to contribute more than 500 million euros to the 3.3 billion-euro restructuring plan for its European unit, Reilly said. Government has given GM a “reasonably good response” to its inquiries about aid, he added.

Unions are unwilling to grant General Motors concessions they agreed to under a proposed takeover by Magna International Inc. unless the U.S. company accepts a broader role for workers in decision making, Klaus Franz, Opel’s top labor leader, said in a telephone interview. After the meeting with Reilly, Franz said that unions are “strongly opposed” to GM’s proposals.

Source: Bloomberg
Image: Reuters Pictures