Opel's Bochum Workers Reject Deal, Prepare For Costly Battle

Bertel Schmitt
by Bertel Schmitt
opel s bochum workers reject deal prepare for costly battle

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, The Bochum works council had been increasingly at odds with the unions.

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  • Ihatetrees Ihatetrees on Mar 23, 2013

    Why didn't GM sever the Opel limb when they had the bankruptcy chance a few years ago?

    • 28-Cars-Later 28-Cars-Later on Mar 23, 2013

      What is "Follies by the GM Board of Directors" for $400, Alex. "The decision to keep Opel is another example of the aggressive approach of G.M.’s board, a majority of which was selected by the Obama administration." So there's that too. http://www.nytimes DOT com/2009/11/04/business/global/04gm.html?_r=0

  • Amca Amca on Mar 23, 2013

    "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.” Well, that's a constructive attitude. Employ us, or we kill you. In which case we, and a bunch of us also are unemployed. Brilliant!

    • Lorenzo Lorenzo on Mar 23, 2013

      It sounds like he's daring GM to declare Opel bankrupt. If it's true that everything worth keeping has already been transferred to other GM entities, that's a dumb thing to do, unless he and his union have something up their sleeves. Somehow I think we'll be looking at another long-running soap opera, one that may top the VW-Porsche miniseries that Bertel declined to turn into a NYT list #1 best seller. Bertel, keep a book outline in mind as you cover this, and assemble copious notes. I'm determined to make you a world-famous author, so don't fight it this time.

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