Now that Opel workers in Bochum refused a plan to keep the factory open, now that an intervention by UAW’s Bob King went exactly nowhere, the question is where to move production of the Opel Zafira when Bochum closes its doors by end of 2014.

In the running: Rüsselsheim, Germany, and Ellesmere Port, UK.

Both locations are top options on the lists of GM and Opel managers, Automobilwoche [sub] says.  Opel’s board of management will make a decision by June, which the supervisory board will have to approve.  A member of the supervisory board told Automobilwoche that  “business aspects” speak for Ellesmere Port, however, he hopes  that the Zafira will remain in Germany.  The union has half the seats of Opel’s supervisory board, and we know what the unions hope.

Porsche is looking to fill 1,400 jobs in for its expanded factory  in Leipzig, where the new Macan SUVlet will be built by the end of the year. A lot of these jobs will go to current Opel workers, says Germany’s Focus.

According to the report, Porsche received  32,000 applications for the 1,400 jobs, “most of them by Opel workers in Bochum, where the plant will be closed by the end of 2014.”  Porsche is looking for 1,000 workers and 400 engineers. Already, a complete Opel team changed sides to work in the new paint shop in Leipzig.

Changing jobs is more attractive to younger workers. Workers who have been at Opel for decades will make more money by waiting to get fired before the plant closes and to collect very generous severance payments of between $200,000 and $300,000.

Bob King’s attempts to ingratiate himself with German unions, and to make Opel’s Bochum workers reconsider their decision to turn down Opel’s restructuring plan, are being ignored. Actually, it appears as if they had the opposite effect. Days after King’s comment, Bochum plant manager Manfred Gellrich rejected new discussions, saying Opel does not want to “waste precious time,” Reuters says. Over the weekend, Opel dropped another bomb: Bochum will be closed completely. A parts depot that was supposed to stay open, will also close its doors.

With the shuttered logistics center, another 420 jobs will be lost, raising the number of redundancies to 3,700, says Der Spiegel. “It does not make sense to leave the distribution center in Bochum,” once manufacture of cars stops, an Opel spokesman told the magazine. Bochum’s works council had not put much faith in the plan in the first place – one of its reasons for rejecting the plan. Opel has another parts center in Rüsselsheim.

The Bochum plant is scheduled to close by the end of next year. Opel will move the production of its Zafira MPVs elsewhere, two years before a planned model changeover.

UAW boss Bob King told Opel’s Bochum workers to vote again, and to this time accept a deal that had been worked out between the German metal worker union IG Metall and GM.

According to Reuters, “UAW President Bob King, who is a member of Opel’s supervisory board, said on Tuesday that workers at GM’s Opel plant in Bochum, Germany should ask to vote again on the restructuring deal they rejected last month that would have kept the plant open through the end of 2016 and retained 1,200 of the more than 3,000 employees.”

The plan had been overwhelmingly rejected by Bochum’s workers. The plant is now scheduled to close by the end of 2014.

King, who oddly sits on Opel’s Supervisory Board as a representative of the union despite being the chief of one of GM’s biggest shareholders, said he “would really hate to see that plant closed when so much effort was put in by IG Metall and the works council to save it.”

The plan is likely to fall on deaf ears. “We gave the employee a clear choice,” spokesman Harald Hamprecht told Reuters. “We respect the outcome. The Opel supervisory board acted accordingly and we are moving on.”

Bochum’s workers have not been heard of, but it is unlikely that they are sympathetic to the plan. They had accused their unions of throwing them under the bus, and they probably won’t listen to a major shareholder of GM.

King is trying to curry favors with IG Metall, and to enlist its help for the UAW’s efforts to organize the U.S. plants of German transplants.

At around 2:00 PM on the afternoon of October 6, 1973, more than 200 Soviet built Egyptian aircraft began to assault Israeli air bases and missile emplacements north of the Suez canal and the established line of defense, known as the Bar Lev Line. During the night that followed, Egyptian combat engineers crossed the canal in small boats and used gasoline powered pumps to throw streams of high pressure water against the massive sand wall the Israeli forces had erected at the water’s edge following their 1967 conquest of the Sinai. The water eroded the wall with amazing efficiency and by the next day more than 50,000 Egyptian troops and 400 tanks had made their way across the Suez, through the remains of the Bar Lev line and out onto the Sinai desert where they forced the Israeli military back in disarray. The offensive, known as Operation Badr was the opening of the 1973 Yom Kippur War and it makes interesting reading. The conflict had lasting effects in region and some say that it helped to set the stage for the Camp David Accords and eventually led to the peace treaty that President Carter helped negotiate between Egypt and Israel. The war also had effects closer to home and, thanks in part to the Arab Oil Embargo that was a direct result of America’s support of Israel during the conflict, it led to a new, fuel efficient car appearing in my family’s driveway.

The Opel Kadett wasn’t running right. My father’s coworker had purchased the little car, 1.1 liter Coupe, new back in 1969 and it had always been a spry little car. It was never a power machine, but with its light weight and manual transmission it could scoot when you wanted to go and it looked good doing it. For some reason, however, the car’s performance had begun to degrade and now, just four years old, it was proving to be a disappointment to its owner. Naturally, my dad bought it for next to nothing.

Once the car was safe at home, my dad, who could fix anything, took a closer look at it. The car ran smoothly and shifted fine, but it was definitely down on acceleration. Under the hood, and with my older brother Bruce in the driver’s seat working the accelerator pedal, my dad watched the carburetor linkage as it moved through its full range of motion. It wasn’t binding, but the butterfly valves didn’t seem to be fully opening, either. An hour of troubleshooting located the problem, two screws under the accelerator pedal had worked their way out over the years and, thanks to their interference, the pedal simply wouldn’t go all the way down any more. Two minutes with a screw driver completed the repair and the little car’s power was restored.

My dad used the car as his daily driver for three years and as the older of my two brothers, Bruce, approached his 16th birthday it became a given that the little Opel would go to him. Bruce drove the car for a year or two without incident and then passed it on to our brother Tracy. Between the two of them, I am sure that the car went on any number of mid ‘70s high school adventures most of which I, who am about 7 years younger than them, never actually heard about. I did hear about the big wreck, however.

There may or may not have been alcohol involved. According to Tracy, he came speeding around a corner to find several kids in the middle of road pushing a go-kart. He swerved to avoid them, put the car into the ditch where it dug into the soft earth and flipped onto its top. Tracy and his friends righted the car, popped out the dented roof and refilled the engine with oil. Unfortunately, they forgot to refill the transmission oil as well and by the time he got the car home the transmission was fully destroyed.

The Opel ended up in our garage as it awaited my father’s attention and, for some reason or other, he never quite got around to getting the parts to repair the little car. Tracy graduated high school, got his first full time job and sunk a part of his monthly salary into a slightly used 1978 Nova coupe. The Opel languished in the garage where it became my own personal play car. I read the entire owner’s manual cover to cover, learned the purpose of every switch and warning light and even taught myself how to recharge the battery to keep the radio working so I would have music as I played. I logged a lot of hours behind the wheel, fantasizing about being out on the road. Although I was only 13 at the time, I naturally assumed that like my brothers the car would eventually become mine. Despite the fact that over the years I endured a whole host of hand-me-downs, clothes, toys, and bicycles, I never did inherit the car. Somewhere around 1981 the little car left our garage and was never heard from again.

The Opel looms larger in my brothers’ transition into adulthood than it does my own but, like so many machines I have bonded with over the years, the little car was more than just the sum of its mechanical parts. Maybe she was a little too old for me, and maybe she had been around the block a few too many times, but the Opel’s clean, utilitarian design helped to shape my view of what great cars should be. The little car took everything my brothers could throw at it and still brought them home safely every time. Its toughness and reliability are legend and, to this day, that Opel holds a special place in every Kreutzer’s heart. It was the one that got away.

Thomas M Kreutzer currently lives in Buffalo, New York with his wife and three children but has spent most of his adult life overseas. He has lived in Japan for 9 years, Jamaica for 2 and spent almost 5 years as a US Merchant Mariner serving primarily in the Pacific. A long time auto and motorcycle enthusiast he has pursued his hobbies whenever possible. He also enjoys writing and public speaking where, according to his wife, his favorite subject is himself.

Opel’s Supervisory Board, with half of its members delegates of the labor union, decided today the first closure of a German car factory in decades. According to Reuters, “Opel will end producing Zafira MPVs at its 50-year old Bochum plant by the end of next year, a move that has triggered a rare and public split within union ranks following months of tough negotiations.”

The closure will lead to the loss of 3,000 jobs in Bochum, as part of Opel’s attempt to put an end to 15 straight years of losses in Europe. It will be a while.

The Bochum plant makes the Zafira, and the current model will be produced through 2016.  Where that will happen after 2014 is anybody’s guess. Opel’s works council in Bochum was betting that GM would not want to shift production before the model change and voted against a compromise deal that would have kept the plant running through the end of the model’s life-cycle. Workers in other Opel plants supported the deal that had been worked out between unions and management.

According to Reuters, “labor leaders in Bochum, a former coal mining town in the economically depressed Ruhr region, believe colleagues at Opel’s other three German plants were all too willing to sacrifice Bochum in order to save their own factories.”

The board decision was pre-ordained. According to German rules, if the board is split, the Chairman can cast a tie-breaker vote. The Chairman of Opel’s Supervisory Board is Steve Girsky. By casting two votes, he sealed the fate of the Bochum factory.

However, Girsky’s tough line will become very costly for GM. Under normal circumstances, closing a European plant even with the cooperation of the unions does not come cheap. As the examples of Antwerp and Genk  show, average severance payments of $200,000 and higher are normal, depending on the age of the workforce. “There won’t be a deal for less than $200,000 per head,” the CEO of a company in the region told Wirtschaftswoche.

In the case of Bochum, the works council opposes the closure, which could mean a drawn-out and costly legal battle and even higher severance payments. Works council chief Walter Einenkel; already threatened “a multi-year, politically and financially expensive affair, which will dominate the public discussion for years to come,” and damage the Opel brand even more.

It will be a very long time until the savings from closing Opel will be realized. Or, as Einenkel predicted, “for Opel the most expensive closure of all times.”

There is one way around it: Bankruptcy. Opel AG is a standalone company that just happens to be majority-owned by GM.  If someone issues a Do Not Resuscitate order and takes Opel off GM’s money drip, bankruptcy would follow in due course.  Word has gotten around in Europe that there is too much capacity, and shedding it via a GM-owned Opel would not be entirely unwelcome. Except among the Opel workers.

Germany’s Chancellor Angela Merkel made appreciative noises over the 4 billion EUR GM wants to invest into Opel through 2016, but gave no indication that she is willing to chip in.

Comments from Germany quickly pointed out that the 4 billion earmarked for Opel are chump change compared to the 50 billion Euro budgeted by Volkswagen for the next three years. The development of one car alone costs in the neighborhood of a billion EUR.  Observers surmised that the 4 billion are not on top, but what Opel has to invest anyway to keep halfway alive. According to Bloomberg, “the new spending will focus on developing 23 vehicles and 13 engines to reach a goal of breaking even in Europe by mid- decade.”  4 billion barely cover a fifth of that plan.

In the meantime, Opel denied rumors that workers are twiddling thumbs at its factories. For months, German media claimed that Opel factories are running at 50  to 60 percent of capacity. Not true, Opel production chief Peter Thom told Reuters.  He said that Opel is running at 70 percent capacity in three-shift operation. “In two-shift operation, utilization is around 100 percent,” he told Reuters on Wednesday.

If that is true Opel would have not capacity problem at all.  Anything above 80 percent capacity utilization is considered ideal, and three shift operations usually are not desirable.

GM CEO Dan Akerson and his dispatched-to-Europe fixer Steve Girsky emphatically denied that its loss-making Opel arm is up for sale or might be merged into a joint venture with equally loss-making  Peugeot.

“As a global automotive company, GM needs a strong presence in Europe – both in design and development as in manufacturing and sales,” Akerson told Reuters in Rüsselsheim. “Opel is key to our success and enjoys the full support of its parent company.”

Opel Chairman Steve Girsky told Reuters that speculation of a disposal was unfounded.

GM announced it will invest 4 billion euros ($5.2 billion) in Opel by the end of 2016 to support new model launches. Opel is set for a 14th straight annual loss while European car sales plunge to their lowest in almost two decades.

GM had an operating loss of $1.8 billion last year in Europe.

GM CEO Dan Akerson and freshly minted Opel CEO Karl-Thomas Neumann will receive a one hour audience with German Chancellor Angela Merkel this Thursday “to discuss the rejection of a plant closure timetable by workers which could speed the factory’s shutdown,” as Reuters reports.

Workers at Opel’s Bochum plant rejected a restructuring deal that would have kept the plant open through 2016 and which would have offered jobs to 1,200 of the more than 3,000 employees after car production ends in 2016. In exchange, wage increases would have been delayed.

Ever since GM and its DC sugar daddy reneged on plans to sell Opel to Magna and the Russians with a lot of help of the German government, GM is not very popular in Berlin. If Akerson and Neumann come begging for money, all they will receive is a cold shoulder.

Buick’s been on a roll this year, their sales are up and their owner demographics are younger than they have been in recent memory. The cynic in my says that’s because half their clientele died of old age, but it has more to do with their product portfolio. Say what? Yep, it’s true, the brand I wrote off for dead last decade is targeting younger buyers with designs imported from Europe and finding sales success. The Verano turbo shattered my preconceptions, but can Buick do it again? A brown Encore arrived one rainy morning to see if it was possible.

Click here to view the embedded video.

Exterior

The Encore isn’t new, but neither is it an American rehash of a tired Euro model. Instead, it is “badge engineering” 21st century style. When I was a kid you knew a new Buick was coming when Chevy or Oldsmobile announced a new product. You also knew what to expect: the same sheetmetal with a Buick logo on the grille and some padded velour thrones. 30 years later Buick is up to the same old game with an important twist: Buick takes Opel models from Europe. Consequently you won’t find a brother-from-another-mother running around with a Chevy logo.

Like its sister-ship, the Opel Mokka, the Encore is a small crossover/hatchback closely related to GM’s other small car offerings. Euro origins are obvious when you park the Encore in an American parking spot, this Buick is tiny. The Encore’s tall profile further accentuates the Encore’s 168-inch overall length, which is surprisingly 6-inches longer than a MINI Countryman. My usual panel of passengers were mixed in their opinion of the styling, I found it slightly cartoonish, in a bubbly and cute sort of way. I kept resisting the impulse to smile every time I walked out to the car, but then again I’ve been told my style sense is not to be trusted. (Seriously Sajeev, what’s wrong with a sports coat over a Hawaiian shirt?) My only complaint on the outside, and this is a big one for me, are the trademark “Ventiports” which seem to be growing like a disease. In addition to getting larger, they have migrated from the fenders (where you only had to see them on the outside) to the hood where they are now visible behind the wheel as well.

Interior

Buick’s reinvention has focused on value pricing and interior quality. The latter is something new for Buick, and something that has impressed me the most about Buick’s latest vehicles. The Encore isn’t a terribly expensive crossover starting at $24,950 and ending at $31,110 for a full-loaded AWD model. Despite the low starting price, the cabin makes extensive use of soft touch plastics lending a more premium feel to the cabin than vehicles like the MINI Countryman, Acura TSX or Lexus CT. Speaking of MINI, the Countryman, (like the rest of the MINI lineup) is a mixture of trickle-down BMW technology, great switchgear, high-style, cheesy plastics and chintzy headliners. Of course MINI’s biggest asset is brand perception while Buick’s brand is more of a liability in some demographics. That’s really a shame because the Encore has not only a quality feel but a very uniform feel as well. While MINI’s cabins are full of highs and lows, everything in the Encore is consistently a notch above the rabble. Equipping the Contryman and Encore as closely as possible reveals the Encore is about $1,500 cheaper once you add to the MINI the features standard on the Encore. Comparing the top-trim of the Encore to the MINI the difference grows to $3,800 in the Encore’s favor. Want AWD? The difference grows by about three-grand.

It seems journalists have a genetic condition that causes us to love brown interiors. The trouble with most manufacturer’s attempts at “thinking outside the black” however is they go half-way. They give you brown seats and some brown trim on the dash, but they leave out the carpets, button banks, etc. Not so with the Encore. GM took the extra step to color-match the Encore’s interior which makes the transformation look well-executed instead of half-assed. I should point out that our Facebook readers didn’t feel the same sort of brown-love as I did, but they are of course wrong. (Sorry guys.)

The Encore may be small, but the interior is spacious thanks to the tall profile, stubby nose and upright seats. Taller folks will have no problems getting into or out of the front or rear seats thanks to large door openings and a low step-in height. I grabbed a few willing tall people for lunch and successfully (and comfortably) took two 6’5″ passengers, one 6’2 gentleman and myself (6′) on a 50 minute trek to the prefect burger joint without a single complaint.

Because the Encore shares seat frames with GM sedans, there are a few compromises. The lack of a power recline mechanism seems odd, especially considering the 2-positon memory seat found in our tester. Using the sale seat frames and rails as a sedan or coupé meant creating some unusual “platforms” in the floor stamping so the seats could be mounted high to get an SUV-like seating position. Consequently the rear footwells might be a problem for big-footed passengers on long trips. A manual front passenger seat is standard, but most models on dealer lots have the optional power seat

Four adults can travel in comfort in the Encore, along with four large carry-on roller bags in the back thanks to a cargo cubby that holds 18.8 cubes with the seats in place. Just don’t push your luck with a 5th passenger unless the trio in the rear are skinny folk, the Encore is a narrow vehicle. If you’re a skier or love box furniture from IKEA, the Encore’s front passenger seat folds flat allowing you to put long, wide items all the way from the dashboard to the rear hatch.

Infotainment and Gadgets

The Encore uses the same standard 7-inch “IntelliLink” infotainment system I praised in the Buick Verano. There’s just one problem, it isn’t exactly the same. Instead of positioning the LCD within arm’s reach, Buick located it in a “pod” on the dash. While the location keeps your eyes closer to the road, it makes the screen look smaller and it means it’s too far away to touch. Logically because of this Buick removed the touchscreen feature and that’s what I find vexing. The same software I found so intuitive and easy to use with a touchscreen made me tear my hair out when entering an address via an on-screen keyboard and the control knob in the dash.

Thankfully I didn’t need to use the keyboard often and the rest of the system is still one of the best infotainment units on the market at any price. The graphics are pleasing to the eye, its responsive and the menus are logical and intuitive. The system also sports one of the best iPhone/USB/Media voice command interfaces available. Compared to the Ford/Lincoln systems, the voice is natural sounding. Compared to the Toyota/Lexus systems, IntelliLink handles large media libraries with ease rather than turning off certain voice commands if you exceed a certain library size. I’d like to compare it to Cadillac’s CUE but I’m trying to forget that experience.

As if Buick’s hushed cabin wasn’t enough, even the base $24,950 Encore models use active noise cancelling technology by Bose. All Encores also get XM satellite radio, Bluetooth audio streaming/speakerphone and a backup camera. Stepping up to the $25,760 “convenience package” adds dual-zone climate control, remote start and an auto-dimming rearview mirror. Leather will set you back $27,460 and brings with it heated seats, a power passenger seat, heated steering wheel and 2 memory positions for the driver’s throne. The $28,940 Encore “Premium” brings rain sense wipers, park assist, collision warning and lane departure warning. The $800 sunroof, $795 navigation system and $595 Bose premium audio system are standalone options on all trims. The collision and lane departure systems are worth skipping in my book since they are warning-only systems and not combination warning and prevention as found in other vehicles. Unless you want the rain sensing wipers and parking assist, spend the money on AWD, navigation or the excellent Bose speakers.

Drivetrain
The Encore uses the same 1.4L four-cylinder engine as the Chevy Sonic and Cruze. Producing 138 HP at 4,900 RPM this mill isn’t targeted at speed addicts. On the bright side, thanks to a turbocharger and some direct-injection magic, the engine manages 148 lb-ft of twist from 1,850-4,900RPM.

GM wisely mated the 1.4L engine to their “small” car 6-speed transaxle which features a low 16.17:1 effective first gear (including the 3.53:1 final drive) which helps make the Encore feel more sprightly in the stop-light races. A tall 2.65:1 effective top gear ratio is what allows the Encore to deliver fuel economy numbers of 25/33/28 (City/Highway/Combined) and 23/30/26 when equipped with the $1,500 optional AWD system. During our week with the Encore we averaged an impressive 32.1 MPG over 862 miles of mixed driving, 0-60 tests, photo shoot idling and my mountain commute.

The day the Encore arrived I needed to take a road trip to Sacramento (100 miles away) so I piled a few day’s worth of supplies in the Encore and hit the road. The Encore devoured highway miles, but not in the way I had expected. The small crossover’s cabin is eerily quiet, the driver’s seat is comfortable and upright but the suspension isn’t marshmallowy soft like my father’s Buick. This meant I changed course and decided to take the long way (you can’t get very excited about Sacramento anyway) through some of my favorite California coastal roads.

My opinion of the diminutive engine changed constantly during my week with the Encore. In the city the low-end torque provided by the turbo and the low first gear make easy work of 0-40 MPH traffic and the Encore effortlessly zipped into narrow gaps on busy expressways. Thanks to the way the throttle is mapped the engine doesn’t feel out of breath cruising on the highway, until you need to pass someone as getting from 60 to 80 MPH takes a Prius-like 8 seconds. Load the Encore up with two people and some luggage and forward progress is noticeably stunted in all situations. However, every time I wished for more power I glanced down at my fuel economy and was reminded that more power consumes more gasoline.

On the coastal switchbacks in California’s mountainous redwood forests, the Encore is back in its element thanks to a low 1st gear, moderately low 2nd gear and a well-tuned suspension. Let’s go over that statement again. A Buick that is “in its element on tight mountain roads.” Never thought you’d hear that did you? Neither did I. The Encore’s relatively low center of gravity, 215/55R18 rubber and tight turning radius make [relative] mince meat of tight curves. Let me be clear, the Encore is still down on power, but I have always said I prefer the slower, better handling vehicle to the vehicle that’s only fast in a straight line. The Encore’s suspension handled broken pavement with such composure I was surprised to find it still uses ye olde torsion-beam suspension in the rear. Could the Encore have what it takes to become Buick’s first hot hatch? I hope GM decides to put the Verano’s 2.0L turbo under the hood so we can find out.

It’s right about now that I realized I had the love that dare not speak its name. Could I have fallen for the charms of a Buick? Had I suddenly aged 30 years without knowing it? That is the only real problem I found with the Encore: brand perception. In many minds, people need a new car and their first thought is “I’ll pop over to the Buick dealer” are the same people in the market for a new mobility scooter. If Buick keeps producing products like the Encore however that may change.

Back in the Encore’s native habitat (the Taco Bell drive-thru or the parking garage at the mall), engine power complaints once again disappear. With a ground clearance of 6.2 inches, the Encore is about average for the modern crop of crossovers meaning you won’t catch your bumper cover on parking lot “headstones” and only tall curbs will cause you worry. The well-appointed interior will make you feel special and the value pricing will keep your accountant happy.

Hit it

• High quality interior for a vehicle in this price range.
• Buick continues to “think outside the black.”
• The second Buick in 2 months I would actually buy. Seriously.

Quit it

• Top level Encore trims still have a manual front seat recline mechanism.
• Collision warning this late in the game without auto braking seems silly.
• Buick’s reputation for elderly clientele.

Buick provides the vehicle, insurance and one tank of gas for this review.

Specifications as tested

0-30: 3.27 Seconds

0-60: 9.6 Seconds (9.1 with overboost)

1/4 Mile: 17 Seconds at 80 MPH

Average Fuel Economy: 32.1MPG over 862 miles.

If you want to know in how big a trouble GM is in Europe, look at Ford. Ford’s European unit sales are similar to those of Opel. They also are likewise beleaguered.  Ford’s EU sales were down 21 percent in February, Opel was down 15.8 percent. The big difference: While GM does not seem to be able to shed capacity anytime soon, Ford had taken swift action.

“Ford’s plan to cut jobs and close plants, once hailed as proactive, may not be enough to halt losses in Europe,” Reuters says today.

Initially, Ford was praised by analysts for closing three plants and laying off 6,200 workers. “But less than five months later, Ford’s slumping sales show it still has some way to go and may struggle to win back business from competitors as it rebuilds profitability,” Reuters says.

Ford sales are dropping faster than estimated. In the first two months of the year, they dropped more than twice the market decline. “The assumptions they made when they published their plan are no longer valid,” said Philippe Houchois, an analyst with UBS told Reuters.

If a proactive Ford can’t keep up with tanking Europe, if three pl;ants are too little too late, imagine indecisive Opel which has lost time and money for years.

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.

I have been trying to make heads or tails out of yesterday’s contradicting news about the big deal between Opel and the unions, and so does German media. So much is clear: The truth and GM’s press release about a “successful conclusion” of the negotiations with the Opel works council are miles apart. There is no deal. Unions and Management are still in negotiations, the negotiations will continue this coming week. Then, the workers have to vote. It does not look good: Bochum’s works council is dead set against the deal. It gets worse.

Bochum’s works council chief Rainer Einenkel tells Handelsblatt that he “does not agree” to the deal. He characterizes his negotiations with management as “very brief.” He says that management told him that there is “nothing to discuss,” and that Bochum either says yes, or jobs will be imperiled from 2015 on.

Einenkel did not want to sign on to what appears to be on the table:

• Opel continues building cars in Bochum, at least through 2016
• The Bochum auto plant will be converted into a component and logistic hub for a total of 1,200 jobs or more.
• Opel attempts to settle new companies and technologies in Bochum, and expects ”a four-digit number of high-quality, new industrial jobs.”
• Bochum goes from three shifts to two, at the expense of 700 jobs, starting in the second quarter of 2913. Affected workers will receive “attractive severance packages and partial retirement programs.”
• Production and jobs at the other three German plants in Eisenach, Kaiserslautern and Rüsselsheim are safe.

And what would the concessions of the unions be? What would Opel get in return?

• The payout of salary increases under the collective bargaining system is deferred until the next salary increase goes in effect.

The last “concession” makes you wonder how bad the situation really is at Opel. Management had tied its hands before and agreed to keep plants open through 2014. Now it puts itself into handcuffs and agrees to keep the doors open and the lights on in Germany through pretty much the end of the decade? And the price for that is what? A contractual pay raise on credit? How much are we talking about? Let’s check.

Last October Opel owed its German workers some $15 million due to a 4.3 percent pay hike negotiated for all IG Metall workers in May. That money was paid in November. The next contractual pay hike is due this May. Then, another $15 million are due. After that, the workers will get their extra 4.5 percent monthly, and whatever the next raise is will be loaned to Opel for another year. Let’s call that $30 million, or three years of Akerson’s salary. Is Opel so hard up for money that it has to bargain away its ability to make serious adjustments of its capacity for what looks like a payday loan? Remember: These are not salary concessions. Instead of getting paid monthly, it’s paid by the end of the year.

And it’s not that the bleeding will stop. Those 700 jobs of the third shift? They will be very expensive to make go away.

Let me again kill a myth. It is not impossible to close a factory in Europe. Not at all, if you have the money. You can close factories to your heart’s content. You can’t fire the people. If you do, it costs you. A lot.

The closure of Ford’s Genk factory was estimated at $1.4 billion, or $332,000 per worker. Ford allocated money, the matter went down with a minimum of fuss. When GM closed its Antwerp facility, it did cost GM around $532 million in termination benefits. Divided by 2,600 workers, it came out to a little bit over $200,000 per worker.

How much do you think those “attractive severance packages” for the third Bochum shift will be if there is a contract that says that their jobs are safe through 2014?

How much will it cost to shift 1,000 workers into those mythical “high-quality, new industrial jobs?” The workers aren’t stupid. Every year they worked at Opel is worth serious money in severance when they get fired. Close to retirement, very serious money. They won’t give it up for nothing. You will have to pay them – a lot – to take those high quality jobs.

Ford did the right thing. It bit the bullet, paid, and moves on. GM on the other hand …

Opel and GM strike me at someone who refinances to a few bucks of a lower payment, but with a much bigger balloon a few years down the road. There is only one way to escape the inevitable: Take Opel bankrupt. The more problems are being kicked down the road, the more attractive and likely a bankruptcy will get.

 Today is Karl-Thomas Neumann’s first day on the job as Opel CEO and chief of GM Europe. Germany’s news channel N-TV greets him with the headline:

“The Opel Adventure Begins: Neumann Takes The Ejection Seat.”

I shall not be moved: Opel union chief Einenkel

Messy, messy, messy: Can’t even close a proper deal with the unions. GM and the unions have an agreement. It is basically as reported this morning. The deal has the signatures of management and unions. One signature is missing, reports Die Welt: That of Bochum works council chief Rainer Einenkel.

With the missing signature, there are doubts whether the deal is legally binding. Says Die Welt: “The courts may have to decide.”

Both GM and the metal worker union IG Metall are interested in bringing the matter behind them. Steve Girsky needs to report mission accomplished to Detroit (even if the result is dubious). The metal worker union already has its eyes on a much bigger prize: The new round of collective bargaining.

The unions want a raise for all 3.7 million German metalworkers, and the chances are good. Volkswagen reported record earnings, BMW and Daimler also have solid profits. The unions want 5.5 percent more this year. They would have bargained for more, would Ford and Opel not be in the poorhouse in Europe. GM wants to pay its workers zero percent more, “but the Americans don’t know the German system well enough,” Opel-union boss Schäfer-Klug told Focus. “Germany has a collective bargaining system, and Opel can’t undermine it. Neither IG Metall nor the other automakers will accept that.”

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.

By Thursday, GM wants to have a definite deal with the Opel unions  at least that’s the deadline Steve Girsky has set. The parties are further apart than Dems and Reps over the sequester. Steve Girsky wanted the unions to agree that Opel’s toolmaking, prototype building and central production planning will be outsourced, or moved to GM’s plant in Gliwice, Poland, Der Spiegel says.  The unions are rightly horrified.

Should the unions say yes to that move, which would cost 700 jobs at home in Rüsselsheim, GM was ready to continue making cars in Bochum until 2016, and possibly provide a few parts making jobs after that. If there is a nein, Bochum will be closed by the end of 2014, or so the ultimatum goes. Opel workers are meeting as we speak in Bochum.

The interesting part is that toolmaking, prototype building and central production planning are centerpieces in the auto business. The engineering of a car and production engineering are more and more part of one big system. Moving toolmaking and prototype building to Poland would shift Opel’s center of gravity – into a Gliwice plant that just has been shifted back to the mothership and that would be safe in case of an Opel bankruptcy.

PS: The meeting in Bochum ended with the workers being told that there is no deal. Girsky wants a deal by Thursday. The unions say no to GM’s offers. It’s a one-sided negotiation: All jobs are safe through 2014 …

The popular wisdom among folks in the auto-biz of my generation (1970s) is that Buick only exists because of China. Why didn’t GM kill Buick in America and keep it in China? The answer is obvious: you can’t sell your brand on its “Americanness” if it isn’t also sold in America to Americans. Buick then is a brand hunting for a mission. It’s also a brand hunting for fresh customers that don’t remember the Century and Skylark, two abominations firmly burnt into my mind. In attempt to solve these problems Buick has ditched their badge-engineering mantra and is rolling out new products targeted at folks from the 80s and 90s. Forced induction and a manual transmission aren’t new to Buick, but the possibility of a desirable small sedan from the triple-shield is earth shattering. Have they managed it? GM tossed us a set of keys to find out.

Click here to view the embedded video.

Exterior

Buick has never been about visual excitement. Even the Oldsmobile Cutlass Ciera was more exciting than the Buick Century. (Admittedly that’s like saying lidocaine is a more exciting party drug than novocaine.) The Verano doesn’t depart from Buick’s past in the style department wearing the least exciting sheetmetal among its direct competitors. Speaking of competition let’s get that out of the way.Now that Volvo has killed the S40 and there is no sign of the V40 on our shores, the Acura TSX, Acura ILX, Audi A3 and Verano are really the only compact front-driving near-luxury options in America. If you want to expand the pool slightly, you can include the hybrid-only Lexus CT 200h, and maybe (and this is a big maybe) the new Mercedes CLA (which isn’t shipping yet anyway).

Why such limited competition? At 184 inches long, and sharing the FWD setup with the Cruze, the Verano is almost a foot shorter than the Lexus ES, one inch shorter than the Acura TSX and about the same length as the new Mercedes CLA. Although the Verano is essentially the same size as a Mercedes C-Class and BMW 3-Series, let’s be honest, you won’t find these fish in the same pond.

Although the Verano shares platforms with the Chevy Cruze, it isn’t a “Buick Cruze.”Instead it’s the American market twin to the Chinese Buick Excelle GT and the strangely named Opel Astra Limousine. This means the Verano shares little with the Cruze (or any other American market GM product) save for an identical wheelbase and common transmissions. Helping take the Verano up a notch our refrigerator-white tester had perfect panel gaps and a paint job worthy of Lexus. Seriously. My question for you is: is there enough visual flair to differentiate it from GM’s more plebeian offerings? Let us know in the comment section.

Interior

My impression of the interior differed from Michael Karesh’s review of the base Verano last year. Is the Verano Turbo a nicer place to spend your time? No, it all boiled down to color. The Verano Turbo I was send wore Buick’s “Choccachino” interior which replaces the black dash, doors and steering wheel with a dark brown version of the same. (The “Cashmere” interior gets a similar swap). The simple (and no cost) color option changes the interior feel dramatically without changing the quality of the materials. There are still some hard plastics within reach of the driver (like the lower dash and portions of the doors) but I must give kudos to GM for thinking “outside the black.”

Regardless of your color choice, the Verano’s ample button banks feel exceptional for a vehicle with a price range of $23,975-$32,000. While the fake wood isn’t going to fool anyone, it is used tastefully and [thankfully] sparingly in the cabin. On the other hand, the satin “aluminum” trim around the infotainment cluster had me fooled until I looked at the Verano’s spec sheet. While a power driver’s seat is standard on most Verano models, I had hoped the Turbo trim would add a power recline feature and adjustable lumbar to the throne but that still can’t be had for any price. An unexpected nicety is a passenger seat with the same range of motion as the driver’s seat albeit with manual levers. As you would expect from a vehicle in the near-luxury category dual-zone climate control is standard and the heated steering wheel on all leather-clad models is a welcome touch not found on most competitors.

Rear accommodations are rarely a selling point with compact sedans of any description. That being said, the Verano’s rear thrones provide as much head and legroom as the TSX or current Audi A3. Compared with its Chevy platform mate, the Verano’s rear cabin is slightly smaller thanks to thicker front seats and a touch more padding in the rear. Although the seats are no closer to the floor than those in the TSX or A3, the shape of the rear door openings made it easy to hit your head when getting in and out of the back, something to keep in mind if you shuttle adults regularly. Despite being longer than the Cruze, the Verano’s trunk is 10% smaller, although its 14 cubes are identical to the TSX’s trunk and in the same ballpark as most of the small luxury sedans from Europe.

Infotainment

Whichever engineer was in charge of the Verano’s center stack channeled their inner Acura, between the infotainment and HVAC controls there are no less than 41 buttons, 4 knobs and one joystick. Despite the button overload, Buick’s standard 7-inch touchscreen “IntelliLink” system is one of the best on the market combining Buick’s previous interface with improved voice recognition, app integration and snappier response times. (If you want so see the system in action, check out the video at the top of the review.) Much like Infiniti’s infotainment systems, you can either use the knob/joystick control in the dash or you can touch the options on the screen. This arrangement works well giving you the option to minimize fingerprints if you so desire.

Buick’s new software package is the close relative of Chevy’s MyLink system and uses the same intuitive voice recognition system for phone, navigation and complete USB/iDevice control. Compared to the MyFord/MyLincoln Touch elephant in the room, Buick’s voice responses are more natural and polished, entering an address requires fewer commands and the system is much, much more responsive. Base Verano models get an unbranded 6-speaker system while all other models can option up to the 9-speaker, 7-channel Bose system which adds a subwoofer, center speaker and some extra adjustment options. The up-level system was well-balanced as you would expect, but compared to other systems in the near-luxury segment the Bose system doesn’t play as loud without noticeable distortion.

Drivetrain

Instead of the Cruze’s 1.8L naturally aspirated and 1.4L turbo lineup, we get a new 2.4L direct-injection four-cylinder engine and an optional 2.0L direct-injection turbo. The 2.4L “LEA” mill is a new engine for GM, based on their “LE9″ engine with an increased compression ratio and some direct-injection sauce to boost power to 180HP and 171lb-ft. That’s not the engine you want, and it’s not why we borrowed the 2013 Verano. This time it’s all about the turbo.

Strangely this is not the same 2.0L turbo found in the ATS and Malibu, this is an older engine found in the Saturn Sky, Fisker Karma and of course, the Regal GS. This upgraded engine is only found in the top-of-the-line “Verano Premium” which starts at $30,000. When jammed under the hood of the Verano, output drops slightly to 250HP and 260lb-ft of torque. Don’t fret about a few lost ponies, the torque still comes to a boil at 2,000RPM and stays strong all the way up the tach.

On the competition front, the TSX V6 may churn out 280HP and 254lb-ft, but in typical Acura fashion it all arrives at high RPMs. We’re told to expect 208HP and 258 lb-ft from the CLA when it lands and the current A3′s 2.0T engine covers the rear at 200HP and 207lb-ft. Sending power to the front wheels is GM’s ubiquitous 6-speed automatic transaxle, or the an all-new (to America) 6-speed manual transmission making the Buick and the Audi the only cars in this small segment that offer a DIY gear changer.

Drive

If the Regal made you think Buick’s path to sales success was Euro driving manners, you’d be wrong. The Verano is a modern Buick, but a Buick none the less with fairly soft springs and one of the quietest cabins available at any price. Think of it as the FWD compact luxury sedan Lexus never built. Even our “sporty” turbo tester with the manual transmission is on the softer side of most sedans. The downside to the quiet cabin is that you can’t hear the turbo mill revving which is a pity since Buick tuned it to be one of GM’s more pleasing exhaust notes.

With 250 ponies and 260 dollops of twist I had prepared myself in advance for massive torque steer and was pleasantly surprised to find strangely little. A quick inspection of Buick’s PR literature clearly shows that the Verano does not get GM’s lauded HiPer Strut tech favoring a less expensive traditional MacPherson arrangement.

The power bump from the base engine is noticeable in every driving situation causing a serious 2.5 second drop in the 0-60 time and improving driveability across the board. With most of the engine’s torque available just over idle there’s far less downshifting to be done on hilly terrain both with the manual and the up-shift-happy automatic. In our testing we clocked a 0-60 run in 6.5 seconds with me at the shifter and the traction control enabled, this more than a half second faster than my time in the FWD A3 2.0T but slightly behind the TSX V6′s 6.2 second time.

The Verano tips the scales at 3,300lbs, a bit heavier than the Audi A3′s 3,219lbs but substantially lighter than the 3,680lb TSX. The relatively light weight, fairly grippy 235/45R18 all-season rubber and well sorted chassis proved engaging and one might even say nimble on the winding roads of Northern California. The same cannot be said of the steering however which, even in this age of electric power steering, has to be one of the numbest vehicles I have piloted in a long time.

Despite the numb steering the Verano was an eager companion on my mountainous commute on California highways 92, 35, 9 and 17 thanks to the slick shifting manual. Buick’s row-it-yourself transaxle is not the same notchy unit found in the Regal, instead this has been lifted from GM’s European lineup and the change is welcome with shift quality equaling the Audi A3 and Acura TSX. (Bold statement I know.) Third pedal effort is fairly similar to the TSX although I actually preferred the predictable and linear engagement of the Buick.

Compact [near] luxury is about fuel economy as much as discount pricing. The Buick scores 20MPG around town and 31 on the highway with the manual, 21/30 with the automatic and 24 combined with either transmission. This slots the Verano at the top of our small segment essentially matching the FWD A3′s numbers and a few MPGs higher than the TSX V6. Thanks to a tall 6th gear in the manual transmission, the engine barely hits 2,000RPM at 70MPH and contributed to our weekly average of 25.6MPG.

Back in 2008 I argued that Buick should be killed for the sake of the company. I figured any Chinese repercussions could be written off in the bankruptcy proceedings and nobody would miss the tripple-shield. Five years later Buick has created a car that I not only rank above the Acura TSX and Audi A3 for overall performance and value, but also because it was also truly fun to drive and live with for a week. The only problem is that Buick image, which for anyone born in the 1970s and 1980s is full of Centurys and Skylarks.

Buick provided the vehicle, insurance and one tank of gas for this review

Specifications as tested

0-30: 3.0 Seconds

0-60: 6.5 Seconds

1/4 Mile:15 Seconds at 98 MPH

Average Observed Fuel Economy: 25.6MPG over 712 miles

For decades, big corporate profits were blasted as a sign of greed, especially by unions. GM changed all that. When a sheep dipped GM, free of legacy finance costs, and not paying taxes due to losses a normal company would not have been able to carry over after a bankruptcy, declared a record $7.6 billion profit in 2011, chests of GM boosters swelled with pride, as if the profits had been theirs. A year later, there is $2.7 billion less to be proud of. GM’s European millstone, Opel, continues to drag the company down. Opel’s operative losses more than doubled to $1.8 billion for all of 2012.

GM reported as $4.9 billion profit for 2012, and “a weaker-than-expected fourth-quarter profit on Thursday, citing wider losses in Europe and lower vehicle prices in its core North American market,” says Reuters. Analysts had hoped GM would do better.

The situation in Europe is expected to be getting worse. CFO Dan Ammann told Reuters that “GM still sees industry sales in Europe declining in 2013 and is “not betting on” a pickup later in the year.”

GM wrote down $5.2 billion worth of assets in Europe. GM’s $423 million investment for a 7 percent stake in Peugeot, is now carried at half price on GM’s books. Ammann said that GM has “no intention of putting more cash into Peugeot.”

Legs of RenCen executives must be covered with black and blue marks from kicking themselves daily for not unloading Opel when the German government offered to take the sick patient off GM’s hands. A deal, financed with $6 billion courtesy of German tax payers and a little petty cash from Russian bankers would have given GM a little money and an immediate end of the huge losses at Opel. Frankly, nobody in Germany had much hope for an Opel under Magna and the Russians either, it was seen as a hospice where to wheel the sick patient until it dies in silence, a la Saab.

At the last minute, GM changed its mind. Who made the ill-fated decision? Was Akerson for keeping Opel, or for getting rid of it?

In 2011, Reuters reported that it was most of GM’s board, with the notable exception of  GM CEO Dan Akerson and another unnamed  person.  In Summer of 2011, Reuters wrote:

“Akerson was one of only two GM board directors who voted against keeping Opel in late 2009, believing Europe was a market of national champion automakers — VW in Germany, Fiat in Italy and Renault in France — and pan-European luxury brands like BMW and Daimler AG’s Mercedes, a person familiar with Akerson’s thinking said. Opel is neither and Akerson believed it would be a long, uphill battle to fix it.”

The matter is more complex than simple chauvinism, and Opel is seen as a national, albeit sick, champion in Germany, but the long uphill, or make that downhill battle remains.

A year later, when the New York Times looked into the matter, the story had changed.  Instead of two people  who had voted for unloading Opel, there were two for keeping it: Akerson and Steve Girsky.  Writes the Times:

“G.M. nearly sold Opel three years ago before its reconstituted board decided to keep the business because of its integral role in the company’s global product programs. Two of the directors who championed the decision to retain Opel were Mr. Akerson and Stephen J. Girsky, the board’s vice chairman.

Now both are admitting that a turnaround in Europe has been far tougher than anticipated.”

The stories are diametrically opposed.  In 2011, a whole board allegedly wanted to keep Opel, but Akerson and someone else were against. A year later, Akerson, along with Girksy,  were said to have been champions of keeping Opel American.

The reporters of both stories are the best in the business. On the Reuters side, Ben Klayman has been an important part of Reuters’ Detroit-based auto team. On the New York Times side is Bill Vlasic, the NYT’s best auto industry reporter and author of Once Upon a Car, the account of the recent “fall and resurrection” of the Detroit car manufacturers.  Both reporters stick to their story. The Vlasic  story reflects the party line. However, the Klayman story is based on solid sources, and Klayman never received a call from GM, telling him the story was wrong, something GM usually is not shy to do.

Now there is one item that had changed: When the board voted to keep Opel, Akerson was a simple board member. He  became CEO in late 2010, and it looks better is he’s firmly behind Opel.

Opel sales chief Matthias Seidl

The rebellion of German Opel dealers against a new, complicated and  – in the dealers’ views – disastrous distribution system was victorious.  Opel’s sales chief Matthias Seidl withdrew  the discredited and disdained design. “Dealers succeeded with their demands for a simpler system,” writes Automobilwoche [sub].

The nixed system was said to destroy dealer margins and to be  so complicated that “I have to hire a mathematician to understand it,“ as an enraged Opel dealer told Automobilwoche [sub]. Opel dealers threatened to stop selling Opel cars.

In the wake of the European Block Exemption Regulation, the regulatory landscape of the European motor trade became much more liberal than that of the U.S.A. Pretty much anybody can sell cars. OEM cannot block dealers from selling competing brands. OEMs can set dealer standards (under the watchful eyes of the EU), but those can be easily circumvented with a much easier service contract with the OEM. Many German Opel dealers already sell Volkswagen.

The new system cuts into dealer margins and is so complicated that “I have to hire a mathematician to understand it,“ an enraged Opel dealer told Automobilwoche [sub]. The dealers say the system is similar to those at Volkswagen and Skoda. Neumann was Volkswagen’s chief in China before  he decided to take the top job at Opel. Seidl came from Saab, but spent 20 years at Volkswagen . Some point the fingers at Girksy “who wants to increase Opel’s profits by decreasing dealer profits,” as a comment in Das Autohaus reads.

Not to anyone’s huge surprise, the Opel Supervisory Board today confirmed  former Volkswagen exec Karl-Thomas Neumann as CEO of Opel. To make the job a little more interesting, “General Motors appointed Dr. Neumann president of GM Europe and GM vice president,” as a GM communique says. It continues that Neumann “will become a member of GM’s Executive Committee and is expected to play a key role in the global leadership of GM.”

“Opel/Vauxhall is a key to General Motors’ global success,” said Neumann’s boss Dan Akerson.  Hm, some people think the opposite is true.

As the picture proves, Neumann goes from a company with the tagline “Das Auto” to a company with the tagline “Wir leben Autos.” Along with a new CEO, Opel also needs a new ad agency. Or rather executives who demand unique taglines.

Offiucially, Neumann wil start on March 1.

Uh-oh: The price of doing car business in Germany is heading up, increasing pressure especially on Opel. “Germany’s IG Metall union may push a pay claim between 5 and 6.5 percent for about 100,000 workers at VW’s six western German factories” Bernd Osterloh, head of VW’s works council told  Reuters today. What does this have to do with Opel, you say?

Metalworker pay is negotiated largely on a union-wide basis, not on a company basis.  If IG Metall gets a 6.5 percent pay raise, then this applies to everybody, including Opel. Osterloh, who also sits on IG Metall’s board, confirmed that “demands for VW workers will be broadly in line with claims the IG Metall will be pushing for about 3.7 million German metal and engineering staff.”

Until October 2012, GM had not paid the 4.3 percent payhike negotiated for all IG Metall workers in May.  Late October, it was decided to cover the deferred raise with a lump sum payment, and to defer the salary raise again for the time after that. This in return for keeping Opel’s plants open through 2016. A week ago, Steve Girsky reneged. I don’t think he will get a similar deal when pay goes up again this year.

Germany’s metal worker union IG Metall proposed a new plan yesterday to solve the overcapacity at Opel  without undue grief on its members:  The union will agree to the closure of Opel’s Bochum plant, if Opel guarantees that no hobs will be lost until 2018. Reuters takes that as a tacit warming up to the inevitable, while demanding the seemingly impossible.

“Previously the union had never openly spoken of accepting a closure of the Opel plant in the Ruhr industrial heartland,” Reuters says. And this is what IG Metall says:

“In order to ensure that workers do not solely bear the risks of restructuring the Bochum site, we must guarantee that no one is unemployed once the manufacturing of the current vehicle ends.”

“We demand security for the employees through the end of 2018.”

“The economic situation of the company (Opel) is worse than ever before and has reached a dimension that threatens its existence. Due to a historically low market share, the production plants in Europe are utilized only to 50 percent,”

Of course, the thought comes to mind that closing a factory while keeping workers on the payroll doing nothing is a bit counter-productive. Don’t blame the German unions for not being open to new ideas that have worked wonderfully elsewhere. GM and the UAW’s former consultant Steve Girsky should be intimately familiar with the program. Before GM went bust, 12,000 UAW members were paid not to work as part of the jobs bank program, and IG Metall demands equal unpaid time for its members.

Industrial-strength theater

Yesterday evening, while yours truly was in seedy Tokyo bars, rubbing shoulders and more with paid informants, word reached us that Opel’s new sales chief Alfred Rieck allegedly threw-in the towel and left Opel in disgust, after only seven months of valiantly trying to move the damaged goods called Opel cars. After a few phone calls to Germany this morning, a different story emerged. Siehe unten.

The Villain from Germany and China: Alfred Rieck

“Rieck did not go,” said one of Rieck’s former colleagues at Volkswagen, “er wurde gegangen.” He has been gone, as the saying goes in Germany’s executive speak. Or as Automobilwoche [sub] puts it bluntly: “Rieck was fired.” Opel’s leaky supervisory board (the leaks usually spring on the union side) floated the story that Rieck had not been up to the difficult, not to say impossible task of turning around sales and market share at Opel. Which, after only seven months on the job, is a bit much to ask anyway.

Before Rieck foolishly embarked on the mission impossible at Opel, he had done quite well. As head of Skoda in Germany, he helped positioning the brand as the smart shopper’s choice. Sent to China, he successfully established the Czech brand in a market awash with brands. Before, the former Marketing Chief of Volkswagen had advanced to Senior Leader in charge of sales and marketing of luxury Volkswagen cars, a task that is nearly as challenging as selling Opels. If you can sell Phaetons, selling Adams should be a cinch. Rieck had been hired by former Opel chief Stracke when he was still in charge. Girsky and Sedran reportedly never warmed up to Rieck. As a man who knew what he was doing, Rieck was in the way at Opel.

The new knight from Germany and China: Karl-Thomas Neumann

The scuttlebutt from Germany also says that fired Opel sales chief Rieck and designated Opel CEO Karl-Thomas Neumann shared the same floor, but few opinions while both were at Volkswagen in China. It is said that Girksy and Sedran could dispose of Rieck while saying that they want to clean house for Neumann. In German management speak, the genre played on the rickety stages of Rüsselsheim is called “Meucheldrama,” a low budget killer epic. Some call it a “Schmierenkommödie” – fringe theater.

The stand-in’s stand-in: Thomas Sedran

In a play awash in fake blood and real losses, Sedran is a paid extra, a puppet played by Girksy and the people who pull Girsky’s strings. Stand-in CEO Sedran is of the species homo auxiliatus, he is a management consultant. Sedran worked for the Munich office of Alix Partners, the same consultancy that helped Girsky engineer the federally-managed bankruptcy of General Motors, and the subsequent take-over by an unholy alliance between the UAW and an Obama administration that owes its existence to the unions. Don’t forget: Girsky himself was a (very generously) paid UAW operative, who came to GM’s board as a representative of the union’s VEBA trust.

According to many reports, it was Girsky who opposed the sale of Opel to Magna and Russian interests, a deal that was to be lubricated with a generous helping of German tax money while GM had none.

Puppet-master on a string and stand-in pro tem: Steve Girsky

Assuming that Girsky had the backing of UAW and Washington, the other boardsitters nodded as usual. Alix Partners had developed an optimistic turn-around concept for Opel in 2008/2009, and the document became the ammunition that helped Girsky shoot down the sale of Opel at the last minute. Germany’s government, from stupidly snubbed Frau Merkel on down, turned into perennial enemies of Opel in a time when Opel could not afford more enemies. Sedran and his Alix Partners employers were relieved. Opel going to Magna and Russia bankers would have meant an assured end of Alix Partners work for Opel. Opel is a management consultant’s dream, as long as the corpse is kept breathing, it will never stop needing restructuring advice. A sold Opel most likely would have caused terminal indigestion at Magna and the Russians, but hey, their problem. Unsold, Opel keeps draining the blood out of GM.

Of course, Opel’s turn-around concept was a dud, or a “Blindgänger” as they call it over there. Unexploded ordnance devices have the nasty characteristics of exploding at inopportune moments over many years, and it is the momentously failed Girsky/Sedran/Alix Partners turnaround of Opel that weighs down on GM’s bottom line, cash flow and stock valuation. Instead of turning around, Opel turned deeper in the morass of a collapsing European car market, to which Opel was and is shackled by its Detroit rulers. The sale to Magna would have been GM’s peace with honor, just like Ford elegantly and honorably untangled itself from the strangulation by Volvo, JLR, et al. Instead , Girsky, ammunitioned by Alix Partners and Girsky’s confidante Sedran, walked GM deeper and deeper into the German quagmire, making Rüsselsheim GM’s Vietnam.

The English extra: Duncan Aldred

It was no surprise to see Girsky dispatched to German shores, first as Chairman of Opel’s supervisory board, then as stand-in CEO, who drafted his water boy Sedran as interim-CEO after someone told him that according to German company law, it is less than smart to be both supervisory board chairman and supervised CEO in personal union. I can well imagine that RenCen executives, sick and tired and bruised from kicking themselves daily for having listened to Girsky’s stupid advice of holding on to terminally ill Opel, told Girsky: “You always knew how to whip those German clowns in shape. Go over there and do it.” Crowned as Emperor of GM’s Europe, Girsky was dispatched on a suicide mission. RenCen got rid of know-it-all Girsky, and had someone to blame. Brilliant.

In the German upper management vernacular, which Girsky hopefully is learning, such an act is called “wegloben”, literally “to praise away”, usually understood as “to kick upstairs” or as “transfer to Siberia” on a one-way ticket.

While in Germany, Girsky had nothing better to do than find the French patient as an ally: PSA, the company that managed to leverage the fact that it is Europe’s second largest automaker into debilitating losses. No wonder GM and PSA get along. We shall keep them as material for the next theater season. Holding a B.S. in Mathematics form UCLA, Girsky is convinced that minus times minus equals plus. (Just don’t add them, please.)

Consultant Sedran’s interimistic CEO gig likewise raised eyebrows, this time in the management consultant community. Changing sides, switching from consultant to manager is not the jump in one’s career as which it is often sold. In the consultancy business, your peers look down on you when you go to the Dark Side. It is usually the under-performing consultants that are disposed into the landfill of executives “at the client.” Once you have landed there, you are supposed to provide your former colleagues (who usually know interesting details of your prior life) with juicy contracts, while the grey beards at the company will not stop trying to trip the intruder, often right into their open knives. The act of giving juicy contracts to your old cronies at the management consultancy often serves as a handy trip-wire. Belatedly, you realize that the consultant’s job of recommending change is much easier – and often much better paid – than the manager’s nasty job of implementing change. Especially in the morass called Opel.

“Man muss schon ein grosses Arschloch sein,” to take a leading position at Opel these days, says my German informant with Saturday-morning bluntness. His assessment of the attraction of Opel jobs, and what assembly of assorted asstute assets they manage to draw, shall remain untranslated. All I can say is that in Germany, the announcement that one signs up as an executive at Opel usually elicits an “was hast du den angestellt?” What did you do to deserve such punishment.

PS: Rieck’s job has been filled, as it is the custom at Opel, on an interim basis. Vauxhall brand chief Duncan Aldred reports as interim sales chief of Opel to interim CEO Sedran until Neumann takes over in March. Girsky praised Duncan for having turned Vauxhall into “the fastest growing brand for retail customers in the United Kingdom.” European auto execs find this statement humorous. Due to UK tax regulations, your first new car in the island nation, and hopefully many more, is a company car as part of your salary package. More than half of the UK’s new car sales are “fleet” sales. According to data released by the UK’s Society of Motor Manufacturers and Traders (SMMT), Vauxhall’s share of the UK market dropped to 11.36 percent in 2012, down from 12.09 percent in 2011. It’s all relative: In Germany, Opel’s market share dropped from 8 percent in 2011 to 6.9 percent in 2012, with Rieck on the job during six months of that year. Compared to that, Aldred’s loss looks like a gain. At least in the world of Opel.