Opel Unions Refuse Wage Freeze in Germany image

German trade union IG Metall said it refuses to accept GM’s demands to freeze wages for employees at its loss-making Opel division.

“This would mean that Opel would not fulfill the industrywide wage hike [in Germany] on a sustained basis and effectively no longer be a part of the industrywide wage structure,” the union said in a statement on Tuesday.

As Germany is close to slipping into recession, GM is increasing pressure on Opel labor unions. GM’s Vice Chairman Stephen Girsky said that a German recession would mean an “incremental challenge” to the automaker’s turnaround plan.

“Germany is slowing down,” he said. “France, Spain and Italy haven’t found a bottom yet. Russia is slowing down; on the other hand, the UK is looking a little better.”

Yesterday, January 22nd, Girsky sent a letter to unions in which he announces that GM will support Opel financially if operations in Germany will become profitable and competitive. Since then Opel unions must agree to “further considerable” cost reductions as the situation in Europe remains ”catastrophic” and signs of recovery are far away.

Girsky also said that auto production at Opel’s Bochum plant in Germany could be halted at the end of 2014 instead of 2016 as it was previously announced, unless unions agree to these conditions and concessions.