Opel: Shots Fired
Not surprisingly, the decision to close Antwerp is not sitting too well with Opel’s European Works Council. Their reply: Forget the wage concessions you wanted from us, and which are so critical for Opel’s survival.
Management at Opel wanted employees to contribute €265m annually to the cause. The unions were ready to deal, but wanted shares. Reilly reneged on the shares, which raised union hackles. Now, the offer is off the table. And with it, an essential piece of Opel’s future.
“Millions of Euros would have to be taken as loans in order to realize Nick Reilly’s intention to close Antwerp,” the works council said in a statement, quoted by Reuters. “These loans would have to be paid back by the employees of the remaining sites in Europe and would not be available for urgently needed product investments and market development.”
The unions are gearing up for a fight: Their statement called the decision to close Antwerp a “breach of contract.” GM had pledged to build the subcompact SUV in Antwerp after the Flemish did not get the job to build the current Astra.
Without union support for a restructuring plan, GM can forget any government loan guarantees. Come to think of it, very little in terms of government loan guarantees has been mentioned lately. Whenever the matter came up, the response was: “We need a viable plan.” An important part of that plan is now missing.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Seems to me that in a global economy the Euro unions don't get it either. Bertel, interesting saga this. I'm getting the feeling there is no good end to it for any of the parties involved.
They will get it before the end (they always do). The reality is the US market is beginning to stabilize, GM went through BK, removed $70 billion in liabilities and as a parting gift were handed $40 billion in cash. They can afford to play hardball with Opel and they can afford the $5 billion or so for restructuring, they would prefer not to pay for it themselves, but in the end, they will.
These are folks who go to work everyday to plants that are a shell of their former selves. I'll bet dollars to donuts that there is pretty of empty parking spaces in the employee lots. This should be a reminder that they work in a car market with too much overcapacity. 2010 is not going to be banner sales year in Europe. Opel/Vauxhall won't be profitable in a best case scenario during the coming year. I guess the unions are entitled to an series of industrial actions that will run the Opel/Vauxhall further into the ground. GM better incorporate their intellectual properties into a separate subsidiary, quick.
Next year's T-shirts may have to say "We were Opel" on the front.