Opel’s Bochum plant closure worth $866 million image

As a part of its drive to return to profitability by next year, Opel has also decided to close one of its plants – in Bochum – in high pay Germany. The cost for the company – 635 million euros.

The figure, which was previously reported in May by Reuters to be of 550 million euros – thanks to insider information – has gone up considerably, and the numbers are definitely trustworthy, as Opel’s parent General Motors president Dan Ammann revealed them.

The closure of Opel’s Bochum plant was definitely one that would be costly for the company, as Germany has one of the highest standards in the world when it comes to workers pay – and the automaker needed a deal to be reached with the IG Metall trade union. Last week, Opel said it managed to reach the needed severance deal, which makes it one step closer to the proposed factory shut-down.

Fortunately for the carmaker, according to Amman, the company has already absorbed part of the total $866 million cost, of which $381 million has already been booked in its financial results for 2013 and the first quarter of 2014.

The figure, of which the rest of the charge – an expected $485 million – would be absorbed over the course of the year is the bulk sum for two plants actually – the car manufacturing facility and the transmission facility at $485 million.

Via Reuters