By on August 23, 2012

GM’s troubled German daughter will close its main factory in Rüsselsheim and its component plant in Kaiserslautern for a total of four weeks in response to a drop in demand for cars in Europe.

According to a Reuters report, Opel will halt production for a total of 20 working days between September and the end of the year. In a statement, Opel’s HR chief Holger Kimmes says:

“The European automobile market is declining dramatically. Now, shortened working hours are the correct measure to bridge the weakness of the market.”

As reported earlier, shortened hours (they can be shortened all the way to zero,) called “Kurzarbeit” (“short work”) in German, are a temporary measure that allows to react to insufficient demand. Workers can be sent home without or with reduced pay, they will receive unemployment benefits of up to 67 percent of their normal pay.

9,300 blue and white collar workers at Opel are affected.

Says Reuters:

“Now that it has the approval of the works’ council and labor union IG Metall for the plan, Opel can apply for subsidies under the German government’s short-work program, called “Kurzarbeit”.

The scheme was used by many struggling companies in the 2008-2009 recession, allowing them to preserve jobs by cutting employees’ hours when plant usage was low and having the government compensate workers for part of their lost wages.”

Germany’s Handelsblatt adds:

“An erratic course of the mothership GM and the crisis in Europe hollowed-out Opel’s foundations. Its market share sinks, creating huge problems with overcapacities. Several attempts at a restructuring failed. Two years ago, 8,000 jobs were slashed in Europe, the factory in Antwerp was closed. Nevertheless, losses in the Europe business piled up to more than half a billion dollars in the first half of the year. In the last ten year, GM lost more than $14 billion in Europe.”  

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19 Comments on “Opel Sends Workers Home...”

  • avatar
    Polar Bear

    To be fair to Opel, their GM owners have prevented them from expanding outside of Europe like Volkswagen did. GM prefers to sell Opel cars as Chevrolet outside of Europe and pocket the money.

    If you are owned by GM you are out of luck.

    • 0 avatar
      Freddy M

      Aren’t Opel cars sold as Buicks in North America?

      • 0 avatar
        Polar Bear

        Oh yes, the Opel Insignia is sold as Buick Regal in the US. As it is in China. The Opel Astra was sold as Saturn for a while. And then you had the Opel Omega sold as Cadillac Catera. And that was just in the U.S. I have seen Opels as Chevrolet in Asia. And then you have Holden in Australia. Holden Barina = Opel Corsa.

        News flash: I see on the web they are going to start selling Opel as Opel in Australia next month.

        If there is a plan behind all this confusion I would like to know what it is.

      • 0 avatar

        No, GM neutered Opel by making the Buick Regal in Canada after the first year. So Opel was screwed again in its export dive.

    • 0 avatar

      That’s like saying that SEAT is prevented from selling in North America. Or GMC cannot sell in France.

      Opel is really a regional brand of GM. GM Europe is reducing hours at one of it plants. That plant happens to be building cars branded with the Opel logo.

      “Opel” is not a company or decision-making organization, it is just a brand. This is a GM issue, not an Opel one. Opel’s brand is just collateral damage.

      • 0 avatar
        Polar Bear

        Opel is more than just a badge GM can play with. Adam Opel AG is a physical presence designing and making these cars. The headquarter is in Russelsheim, Germany.

        If I sound sentimental on behalf of Opel, it is because the brand has a long history and I would hate to see GM mishandle it. Which GM is perfectly capable of.

        We will never know if Opel could have done better on its own, but we do know Volkswagen is a global brand and Opel is not despite its cars being sold all over the place.

    • 0 avatar

      “GM prefers to sell Opel cars as Chevrolet outside of Europe and pocket the money. If you are owned by GM you are out of luck.”

      Unless you are Chevrolet

  • avatar

    I’ve been watching the Eurozone slide into recession for the past year. If Germany goes into recession, who is going to bail-out the Germans?

    This problem is larger than Opel. It is also affecting FIAT, Ford and Peugeot.

  • avatar
    Polar Bear

    Over at the Volkswagen Group, uncle Ferdinand is full of money and bent on world domination.

    • 0 avatar

      I guess VW should be losing money in Europe too, but those numbers are not published…

      • 0 avatar

        I find that very unlikely. While Volkswagen does not publish regional numbers, they do publish numbers per brand. And vw the brand still is earning billions in operating profit. Which does bout include China… so if they were losing money in Europe they’d have to make very high margins in the rest of the world. As high a luxury brands…

  • avatar

    The German government is paying for the workers to stay home. Isn´t that a subsidy to Opel? I thought this was a no-no in Europe.

  • avatar

    They get 2/3 pay for doing nothing. Not as generous as what UAW members got but still not bad. And that will contribute to the losses further weakening the plant.

    Europe is a mess financially, who thinks they can continue to build the same number of cars if no one buys them? I know how important it is for every worker to have their job but they need to face reality.

    Blaming BM or calling them bastards doesn’t change simple facts. If you lost 14 billion dollars on a venture would you keep it going?

    • 0 avatar

      This is about the last man standing. I can’t help but feel that GM felt the loses were worth it if someone else in Europe folded first.

      That way they could pick up a piece of market share. But as no one is cooperating (folding) the loses just continue.

    • 0 avatar

      The German system used to be even more generous until losses incurred by unification made it necessary to tighten things up. Despite that the German unemployment rate wasn’t bad and the country was very productive and prosperous. Sort of put a dent in my liberal/conservative world view at first.

  • avatar

    Like it or not, Opel is a division of GM. Working against the parent company is disloyal and damaging to the entire company.

  • avatar

    Opel is beginning to sound like a SAAB story…

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