After a round of psychological warfare with targeted leaks, GM seems to be ready to attack the overcapacity at lossmaking Opel in earnest – eventually. The German government reportedly has been informed that Opel wants to close Bochum. Jobs will be exported to low cost countries such as Poland, Russia, China, India, Mexico and Brazil. Cars will be imported even from China.
Germany’s WAZ has learned that Opel Chief Karl-Friedrich Stracke informed the head of the Berlin chancellery, Ronald Pofalla, that Opel’s Bochum plant will be closed in 2015. Earlier closures are contractually verboten.
Germany’s Spiegel laid its hands on an internal strategy paper (“Global Assembly Footprint”) that says that Bochum and Ellesmere Port will be closed. The paper also calls for capacity increases in low cost countries. Opel’s plant in Gliwice, Poland, is scheduled to increase capacity by 25 percent. By 2016, GM wants to import up to 300,000 cars to Europe from Mexico, Korea and China.
In addition, GM plans to lower the number of models worldwide by 2018, by reducing the number of platforms to less than 15 from the current 30 and by barely developing models for a specific market such as Europe, Spiegel says.
Opel’s works council is likely to be informed by Monday. The measures may or may not be discussed at Opel’s supervisory board meeting on Wednesday. Labor has half of the board votes and already announced that it will oppose closures.
GM’s biggest enemy is time. To appease the unions, GM had agreed to no plant closures or firings through 2014. This means that GM is looking at at least four years of losses: Three years that continue the status quo, plus one year of golden parachutes for the fired workers. Closure of one European plant could cost as much as $2 billion, another internal GM paper says. What’s more, moral and quality at the redlisted Opel plants is likely to sink, labor relations will get complicated.
Hat tip to Dipl. Ing Duweisstschon