Opel Fix Will Cost More Time And Money Than Anyone Expected
Last Saturday, Opel CEO Karl-Friedrich Stracke wanted to address the workers at Opel’s Bochum plant. All he addressed was 2,000 backs as the workers got up and left.
What triggered the row was Stracke’s unwillingness to commit to Bochum’s future beyond 2016. Last week, GM started to negotiate Bochum’s closure with the German metal workers union IG Metall. GM offered to keep Bochum open until the end of 2016, that’s two years longer than GM’s contract with the unions requires. In return, GM wanted salary concessions from its workers, Reuters says.
Bochum workers say no deal. “We won’t pay for our own funeral,” Opel shop steward Rainer Weinmann told N-TV. When Stracke didn’t offer something better, the workers walked.
Meanwhile GM told Opel works council chief Rainer Einenkel that €500 million ($633 million) have been earmarked for Bochum’s closure. Einenkel says twice as much will be about right. “Includingh restructuring costs, about a billion Euro will be about right,” Einenkel told Germanys’ WAZ,
One of the reasons for GM’s stock being way down is the bleak outlook for its European operations. Massive firings can become a very costly exercise in Germany – unless the company goes bankrupt. It looks as if a solution to GM’s hemorrhaging will cost more time and more money than anyone expected. As things stand, losses for the next five years are pretty much a given. Unless …
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The Opel tragedy continues, at this point I'd say its well into the second act, the third should be interesting.
Oh yeah! Old school labor strife, like British Leyland used to do it! Awesome how THAT ended!
Opel, which is now GMs engineering powerhouse, is not a profitable manufacturer. As a taxpayer I want to see GM do well but I generally think the company is beyond complete recovery.
The big question here is why can VW which most Americans consider a very sub standard car company wrt to quality sell well in Europe while Opel languishes in the cellar? Could it be marketing??