By on June 18, 2012

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 …

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11 Comments on “Opel Fix Will Cost More Time And Money Than Anyone Expected...”

  • avatar

    GM Leadership, at many levels, has a habit of firing or diminishing people who are smarter than them. Fritz Henderson wanted to sell Opel, but the plan was stopped. He wanted to get out to soon-to-be-bankrupt (for your extra 1.5% tax out of your paycheck) Detroit.

    Fritz… you were right.

    • 0 avatar

      Henderson wanted to dump Opel, but also wanted to keep the technology. No way that would ever happen.

      But locating GM HQ at the Warren Tech Center does make a lot of sense. But the political fallout of leaving Detroit on top of having the top executives actually seeing first hand, the results of their poor management, turned upper managers already weak spines to jelly.

  • avatar

    The tides of reality are beginning to crash on the sandcastles of debt + entitlements

  • avatar

    No pain, no gain. GM will have to bite the bullet and re-structure its Opel unit. Bankruptcy as it exists in USA is not an option since it would entail the company to disappear and with it over 6% share of the European market…and that, even in depressed Europe today, is over 1 million units a year.

  • avatar

    “What triggered the row was Stracke’s unwillingness to commit to Bochum’s future beyond 2016.”

    I’d like to have job security through the end of 2012. Gimme a break.

  • avatar

    The Opel tragedy continues, at this point I’d say its well into the second act, the third should be interesting.

  • avatar
    Vance Torino

    Oh yeah! Old school labor strife, like British Leyland used to do it! Awesome how THAT ended!

  • avatar
    Educator(of teachers)Dan

    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.

  • avatar
    Felix Hoenikker

    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??

    • 0 avatar

      VW is about good design triumphing in the market over quality and engineering. Opel has neither design nor quality nor engineering. Their cars are awkward looking, heavy, and unreliable. Just check out what the Buick Regal has done for Buick’s consumer scores.

      • 0 avatar

        Volkswagen don’t produce particularly good-looking cars though – there’s just a perception of quality, which in my experience at least is misplaced.

        And to address Opel/Vauxhall durability, in my experience, they’re about the most reliable cars out there. A lot of people find them handsome too. Every time a new Astra comes out the praise for the styling is enormous, as it was for the Insignia.

        Heavy? No more so than their competitors.

        They’re decent cars (in general better than their Volkswagen equivalents, for sure), but the market assumes they’re not. Over time this has led to the situation now – an Opel is as desirable to the average European as a Hyundai!

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