Opel reaches deal with German factory workers image

General Motors, which is pulling out Chevrolet from the European region, is supporting Opel in its reorganization process, a strategy that would also see the closure of one of its home plants, in Bochum, Germany.

The plant is a crucial step in Opel’s drive to cut down on spending, as the home country is very high on the labor costs list – while other countries in Europe, especially in the Eastern part, would make the same models with a fraction of the costs.

Opel now announced it managed to reach a severance agreement with the factory staff, after negotiating with labor union IG Metall about the terms of the closure ever since the company made public the plan to shut down the factory, in April last year.

According to the European unit of General Motors, the deal was “binding and reliable” and would allow the carmaker to go ahead with its plan to stop car production in Bochum, although there were no details revealed about the actual costs that would be incurred for laying off the employees at the plant. According to previous reports from sources close to the matter, the cost would be of at least 550 million euros ($754 million).

The parent company, US automaker GM announced in June that it expects its European division – Opel and Vauxhall – to report profit in the region by 2015, while previously it only said it expected the unit to manage to break even – as Opel faces non-recurring costs for 2014 at least, from currency exchange, the plant closure and other moves tied to the restructuring process.

Via Reuters