By on March 25, 2012

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

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12 Comments on “Opel To Close Plants In Bochum, Ellesmere Port, Will Import Cars From China...”


  • avatar
    Lampredi

    Selling Chinese-built cars in Europe – good luck with that…

    • 0 avatar
      Robert.Walter

      The Honda Fits sold in Europe are built in Honda’s 100%-owned plant in China; and this has been the case for about 5 years running…

      http://world.honda.com/news/2005/c050624.html

      • 0 avatar
        Cammy Corrigan

        Really? Because Honda UK’s plant in Swindon seem to be under the impression they were supplying the Honda Jazz (A.K.A Fit) to the European market.

        http://news.bbc.co.uk/1/hi/england/wiltshire/8293841.stm

  • avatar
    acuraandy

    When will organized labor learn – if you get too greedy, the company that is ‘screwing you’ will simply pack up and leave town. Then you’ll have no job at all.

    Morons.

    • 0 avatar
      Hildy Johnson

      Opel’s unionized workers aren’t any worse or better than those at VW; in fact, their productivity used to be higher. Yet, VW is doing fine, while Opel is sinking. It’s not the workers but GM’s abysmal management and product planning that did this.

      Morons.

      • 0 avatar
        28-cars-later

        VW has ten brands and global sales/manufacturing operations, Opel does not. The European car market is tightening up, if Fiat’s woes are any example. If VW’s European operations fall short they can transfer profits from elsewhere, Fiat looks to be betting on its profitable Chrysler operations for the short term. But what can Opel do? GM may have cleared quite a profit recently but the future is murky at best. The union sees dollar signs at RenCen and didn’t want to budge. Honestly I see Opel’s only viable future in export, but the General is likely to curtail this (at least to North America). It looks like they are trying to maintain the status quo and just keep the lights on with these plant closures and shifting production to other countries. If that’s the wrong move you can blame Opel/GM’s leadership. But the fact they are moving production to cheaper countries can be blamed squarely on the unions. They are not in the position of Daimler, BMW, or VW, their employer is on the ropes they needed to band together and give up some big concessions if they were going to survive. Saab is gone, want Opel to be next? I could very much see GM eventually shuttering manufacturing operations in Germany if necessary and keeping the engineers around to design its next generation of global models.

      • 0 avatar
        Hildy Johnson

        VW’s ten brands are a red herring. The only one of them that has been consistently profitable is Audi. Skoda is mostly profitable, the others are hit and miss or worse.

        When VW was in deep doodoo a couple of years ago, the management did win significant concessions from their unions. How? They made it clear that they were genuinely committed to keeping as many workers employed as possible, and for the long haul. Winterkorn’s aggressive growth strategy is a daring attempt to remediate VW’s abysmal productivity – instead of firing half his workers, he decided to double the output. There’s a way to get your workers on-side – unionized or not!

        GM management simply doesn’t get how the workers tick, they don’t get how the market ticks (look at Astra vs Golf sales and cry), and they don’t show any convincing long-term commitment to either that could induce the workers to pitch in with concessions and commitments of their own.

        Some time back when the Opel sale seemed imminent, it was quite clear that the unions couldn’t wait to be rid of GM. Same goes for senior Opel management – Forster left, Demant left. The Opel employees are simply through with GM. It seems too late to make amends now.

  • avatar
    Joss

    What about the cost of shipping cars to EU from China? Oil’s heading north. Must be some kickbacks for GM from the Chinese.

  • avatar
    Conslaw

    In what universe will this strategy work? Opel is to GM what Spain and Greece are to the EU.

  • avatar
    Tstag

    So wait despite the fact that the UK buys more cars of GM than any other market in Europe and despite the fact that Ellesmere plant is GM’s most efficient plant in Europe, it’s set to close?

    As a Brit I think we should alter our Labour laws with immediate effect to stop GM simply taking the cheap option.

    • 0 avatar
      acuraandy

      @Tstag:

      As critical as I am about GM labor, their upper management is even worse IMO. GM management could honestly give a shit less about their labor force, wherever it is (sans China, since their market share there is extremely large, and labor is among the cheapest).

      As for Opel shuttering the Ellesmere plant, I agree, it makes no sense. Most current American CEOs of Fortune 500 companies are brainwashed seemingly from birth that their labor is expendable at all costs; and with how the Opel union has acted, who can blame them?

      For example, FoMoCo just shuttered the Twin Cities Assembly Plant here in the ‘States’ around last Christmas; this plant was the only Ford plant in the world that produced its own electricity (hydroelectric plant on Mississippi River, excess was SOLD BACK to the local electric company!), and was among the most efficient. It had also been in continuous operation since 1925.

      Must be something in the water in eastern Michigan that shuts off the brains of ‘Big Three’ execs (see: Volt/Ampera)…

  • avatar
    Cammy Corrigan

    “GM’s biggest enemy is time.”

    No, GM’s biggest enemy now is a load of pissed off UK and German workers…

    Extremely disappoainted at this decision. Just goes to show you that being the most efficient plant in GM Europe counts for jack.


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