By on February 28, 2013

 

If you think that GM will get a handle on its abundant capacity problems in Europe – abandon all hope. Or rather: Postpone hope for until after 2016, or maybe later. Also, write off any  expectations that Steve Girksy would successfully play hardball with German Metalworker Unions. Deadball is more likely. With the decision to move the production of Opel’s Astra volume model from Rüsselsheim to Ellesmere Port, and to shift production from Bochum to Rüsselsheim, the fate of the Bochum plant appeared to be sealed.

German unions declared war. Minutes ago, Opel works council chief Wolfgang Schäfer-Klug announced “an armistice” (Das Handelsblatt) and told German media that Opel will continue making cars in Bochum through 2016. Nobody can be fired, no plants can be closed at Opel until January 1, 2017. Even then, Bochum will remain open.

Currently, there is a firm contract with Opel unions that rules out plant closures and lay-offs through the end of 2014. Apparently, GM management decided to have its hands tied for at least two more years. Once car production ends, Bochum workers will find job security for another two years. Even after 2016, Bochum will not be closed, it will continue making components. Opel will have to pay salaries pretty much through the end of the decade.

According to the reports, this is an “agreement in principle.” It  is unknown what the unions offered in return. Girsky had set a deadline  for today and threatened, he would close Bochum by the end of 2014. He lost.

While Opel workers have gained a few years, they could do better: Volkswagen announced yesterday that each of its more than 100,000 workers in Germany will receive a bonus of nearly $10,000. While GM is scraping the bottom in Europe, VW writes a billion dollar “thank you” check to its workers.

UPDATE

Hours after the news made the rounds, Bochum works council Walter Einenkel said they are bogus: “There is no agreements, simply because our side did not have the opportunity to discuss this among ourselves, not to mention to clear the matter with management,” Einenkel  told Die Welt.  “In the meantime, we have received a so-called master agreement – I could only skim it. Neither me nor the other members of our committee are able to evaluate this in such a short time.”

Einenkel told the paper that he “had seen a lot” in his 40 years at Opel, but “this is matchless.”

MORE UPDATE

Now, unions are “just about to reach an agreement,” says Reuters. IG Metall expects to strike a deal this week.

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11 Comments on “Armistice Confusion At Opel: Unions 2, Girsky Nil – Wait, Game Not Over? Never Mind …...”


  • avatar
    gslippy

    Well, such stability will make the calculation of losses simpler for everybody.

  • avatar
    Conslaw

    The best farewell that the government can give GM is to force them to ditch Opel and to do the best they can to nominate a board of directors with the expertise and balls to hold management accountable and clean house if necessary.

  • avatar

    Done deal, such as it is: http://media.gm.com/media/intl/en/opel/news.detail.html/content/Pages/news/intl/en/2013/opel/02-28-deutschlandplan.html

  • avatar
    ect

    I’m trying to figure out how this could possibly make sense for GM, but I can’t. It reads as if GM’s response to huge overcapacity at Opel, coupled with a contract that forbids plant closures during the next 2 years, is to identify a plant that should be closed and then guarantee that it will remain open and in full production for for a further 2 years, beyond the 2-year guarantee it already has.

    A lot of people will bash the “greedy union”, but the results of a business are always the responsibility of management. The union has a single purpose, which is to get whatever it can for its members. If they get too much, that is mangement’s fault for caving in, not the union’s for asking.

    Beyond that, there is the question of what GM’s strategy for Europe actually is. Opel and Vauxhall appear to have significant brand equity, but rather than reinforce those (still successful, if the sales figures we see here are accurate) brands, GM chooses to set up a parallel structure to introduce Chevrolet as a new brand into a mature (and currently declining)market.

    One wonders.

  • avatar
    Truckducken

    Options…
    1) Spin this dog off, and let it die.
    2) Sell/donate it to VW.
    3) Enjoy the bleeding.
    I was going to add ‘Build low priced cars for developing markets’, but then remembered where the asset base sat. I do not envy GM. Short of developing a home run product, this is a no-win situation.

  • avatar

    Girsky is incompetent, greedy, corrupt and evil. then again that is only my opinion. of course I could be wrong. not likely though.

  • avatar

    So what did GM get in return for keeping the plants open for another two years? Now, I am confused.

    GM could have shut Bochum completely by end of 2014. In exchange for keeping the plant open two more years, GM demanded wage cuts across Germany plus axing 700 jobs from Rüsselsheim. How did the unions manage to negotiate GM into keeping Bochum open till end of 2016, and keep 1200 jobs even after that. Plus no wage cuts or job cuts at Rüsselsheim. WTH happened? How is this a win for GM?

  • avatar
    Jeff S

    They need to start closing Opel and write the loses off. GM needs to concentrate on Asia, NA, and South America. Take the losses now by closing Opel and move on.


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