The Truth About Cars » Einenkel The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 16 Jul 2014 16:33:07 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Einenkel Opel’s Bochum Workers Reject Deal, Prepare For Costly Battle Fri, 22 Mar 2013 13:31:08 +0000

GM has a huge problem in Bochum – or an unexpected opportunity.  Workers at Opel’s Bochum plant yesterday refused a restructuring plan that would guarantee auto production in Bochum through 2016, and that would keep the plant making components after that. GM answered on the same day:  ”Production of the Zafira Tourer and  the waiver of enforced redundancy will end after 2014.” This would open the door to closing the doors in Bochum.

It also could become extremely costly for GM.

After other Opel plants had voted to accept the restructuring plan, workers at Bochum rejected the proposal yesterday with 76.1 percent of the votes,  Automobilwoche [sub] says.

Currently, there is a contract that keeps jobs safe and plants open through 2014. The restructuring plan would have extended the production of the Zafira through 2016. After 2016, Bochum would have been used for component manufacturing and a parts depot, employing 1,200 workers. Currently, 3,900 people work in Bochum. This number can now be reduced to 420.

What sounds like a win for Girsky & Co. can become a huge drain on GM’s profits. According to German law, GM can close the Bochum plant, however, it would have to offer jobs at other German plants.  If Opel wants to get rid of workers and payroll, it must negotiate a restructuring plan with the works council. That failed yesterday. If there is no plan, and  if  the works council opposes, fired workers  can and will sue Opel. The severance payments will then be determined in court. This mean s huge exposure for a large company with deep pockets and few friends in Germany.

Assuming an average negotiated severance payment of $200,000 per worker (using  Opel’s Antwerp and Ford’s Genk plant as examples), a good negotiated deal with a cooperative works council would cost GM upwards of $700 million. In an adversarial situation, this number could quickly snowball to several billions. A few weeks ago, Bochum works council chief Einenkel  promised “the most expensive plant closure of all times.” He said it “ would cost GM billions,” and that “Opel would not survive this.”

It looks like the Bochum workers have written off Opel and want to get out for as much money as possible. In their situation, I would do the same.

The refusal of Bochum’s workers also signals troubles with the IG Metall union. The Bochum works council had been increasingly at odds with the unions.

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Opel Labor Leader Threatens Mother Of All Plant Closures Sat, 31 Mar 2012 17:46:06 +0000
“This would be the most expensive plant closure of all times,” warned Rainer Einenkel, chief of Opel’s works council and Vice Chairman of its supervisory board.  “This would cost GM billions,” Einenkel said today at a news conference following a staff meeting in Bochum. “Opel would not survive this.”

A few days ago, Germany’s motor mouth Ferdinand Dudenhöffer had painted a semi-rosy picture. Sure, paying each employee $200,000 as severance would hurt. But closing Bochum would save around $280 million a year, three years later, the investment would be paid back, Dudenhöffer argued. Payback would not happen until 2018, closures are only possible starting in 2015.

Dudenhöffer and GM management are dreaming, says Einenkel. There are no 3,200 workers, but 5,000. Some 1,800 are loaned to partner companies, but have a contract in Bochum. Workers “won’t go voluntarily,” Einenkel told Reuters, signaling costly fights in the courts. The Bochum plant sits on top of former coalmines, no investor will buy the plant, fearing uncontrollable environmental cleanup costs. Closing Bochum could also severely damage Opel’s brand, Einenkel said.

Before that happens, Opel will severely damage GM earnings , for many years.

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