Opel Abandons Bochum Completely

by Bertel Schmitt

April 29th, 2013 6:45 AM

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.

#BertelSchmitt #Bochum #Germany #GM #IGMetall #Jobs #King #Opel #Uaw #Unions

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9 comments

Burakvtec on Apr 29, 2013

another victim of General Motors,opel was walking dead already after mid 90s....

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- Znueni on Apr 30, 2013
  
  Likely true for Bochum even if market was healthy and volumes were same as decade ago. If each Opel factory improved 3-4% per year, after a decade you need 1/4 to 1/3 less factories just from productivity gains....
  
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Dubbed on Apr 29, 2013

About time. GM has been hemorrhaging money in Europe for to long. Their are way to many auto plants in Europe for the size of its market. I'm rather curious as to why only the American headquartered european divisions are the only ones capable of shutting a plan down (excluding PSA Peugeot Citroen). I really never thought this day would actually get here.

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Conslaw on Apr 29, 2013

In my mind, there's something fundamentally wrong (whether it is in Europe, the US or anywhere) when you have a paid-for plant full of paid-for equipment and an existing, experienced labor force, and you can't find SOMETHING for them to produce. The problem could be bad management, inflexible workers, governmental policies (including trade policies) or a combination of factors. When your country gets so expensive that you can't afford to make ANYTHING there you have to make big changes.

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- Marcelo de Vasconcellos on Apr 29, 2013
  
  Me too
  
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- Onus on Apr 29, 2013
  
  Great perspective. Never really thought of it that way.
  
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- Ect on Apr 29, 2013
  
  1989-91, I negotiated a JV in China. 3 parties, 1 was a Chinese SOE (this company had the factory). One of the most difficult parts of the negotiation was that they kept wanting to know (and insert in the contract) what our production would be. Our answer was always, "as much as we can sell" - which completely baffled them. In their centrally-planned world, they were used to receiving instructions from Beijing about what & how much to buy, what & how much to make, and where to ship finished goods. In our market-based world, things were very different. Opel and Bochum exist in a market-based world. Opel apparently can't sell enough cars to justify operating all of its production facilities. So, 1 has to close. Whether Bochum could be retooled to make something else is a moot point. Opel makes cars, not other things. Maybe they could sell the facility to somebody else, maybe not. Given the overcapacity in the European car market, though, it won't be to another carmaker.
  
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- George Herbert on Apr 29, 2013
  
  You are falling into what is quite literally one of the oldest logical traps or fallacies in economics - the sunk cost fallacy. That you have spent money does not mean that what you have is of value, or useful for producing products that customers exist to buy. A bubble causes overspending on capital (plants, machines) and workers beyond what the post-bubble-burst market will support. The extra money spent on plants and machines is wasted. You have to write it off. It may be useful later; in many cases, three or five or ten years later you can be up and running again. Mines work on that cycle all the time. Sometimes mechanical plants. It depends on how well the equipment holds its value while idled (is it still useful for producing cars in three, five, eight years?). It can help ease growth going forwards to open it back up again.
  
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Alluster on Apr 29, 2013

I will believe it when I see it. GM has chickened out in the past and gave into Union demands. I guess we will find out in a couple of years if this time it is really different. About time GM grew a pair and made the right moves. It sucks that people will lose their jobs. But again, what was the alternative? I am guessing Opel sales are down at least 40% from 2007 levels. When they lose so many sales it is really hard to continue without plant consolidation. Fixed costs are too high and over capacity kills any hope of break even. Opel and Vauxhall have outperformed the market so far this year. Sales in Russia, Middle East, China and Australia are up from last year. The Mokka sourced from low cost South Korea is selling very well. Closing Bochum in its entirety is the best possible move. Keeping parts of the site open as a distribution center will not net the most savings.

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