Opel reaches deal with unions on future of German plants

Unions and management at German carmaker Opel, the loss-making arm of US auto giant General Motors, reached agreement Thursday on the future of the group's four German factories beyond 2016. GM had warned last month that Opel's plant in Bochum, western Germany, could be closed at the end of next year if management and unions failed to agree a turnaround plan by the end of this month. But the two sides reached a deal on Thursday whereby management would uphold its pledge to retain Bochum as a components and logistics site once auto production had been phased out there at the end of 2016. "In order to safeguard its future beyond 2016, Bochum will be turned into a components and logistics site," the head of Opel's general works council Wolfgang Schaefer-Klug said in a statement. There would also be no compulsory redundancies until the end of 2016. "Concrete plans and guarantees have also been agreed for the other German sites," Schaefer-Klug said. Opel has three other sites in Germany -- in Eisenach in eastern Germany, which builds the Corsa and Adam models; a components factory in Kaiserslautern in the south west; and the core production plant at Ruesselsheim, near Frankfurt. "Details still have to be worked out and cast in a labour contract. But this, in principle, is the breakthrough," he said. A feared closure of Bochum had been averted. Opel currently employs about 3,200 people at the plant which produces Opel's Zafira model. The giant IG Metall labour union said that a "four-digit number of high-quality jobs" would be kept at Bochum, while Opel supervisory board chief and GM vice chairman Steve Girsky, in a separate statement, put the figure at 1,200. "Today is a good day for Opel and a good day for GM. Opel is and remains a central pillar of our global GM business. This turnaround plan is an important milestone for Opel to return to profit by mid-decade," Girsky said. "With it, we'll get our costs under control." Opel, which has been making losses for years, is hoping to launch a number of new models over the coming years, and also cut costs in order to steer back to profit. GM estimates it stands to lose more than $1.5 billion (1.2 billion euros) on its European operations this year and wants to steer Opel and its British sister brand Vauxhall back to profit by 2015. Opel and Vauxhall are heavily dependent on the European market where industry-wide sales of passenger cars fell 8.2 percent 2012, according to data published by the European automobile makers' association.