GM to keep all German Opel plants open

GM to keep all German Opel plants open
Photo: DPA
General Motors has decided to keep open all four of its Opel plants in Germany, the US carmaker's interim Europe chief Nick Reilly said on Tuesday.

After already giving assurances that plants in Bochum, Kaiserslautern and Rüsselsheim would not be shut down, Reilly promised Opel’s facility in Eisenach in the eastern state of Thuringia would also remain open.

“We value our Eisenach operations very highly,” Reilly said, calling them a “long term resource” for Opel. “It’s a highly efficient plant and the people who are working there are very innovative.”

Despite abandoning plans to sell its loss-making European operations, GM still intends to slash capacity by around 20 percent with the loss of nearly 9,000 jobs across Europe.

Klaus Franz, head of Opel’s German works council, said that GM wanted to cut a total of 8,684 jobs across Europe, including around 7,200 in Germany and Belgium, 900 in Spain and 354 in Britain at Vauxhall’s Luton plant.

The German cuts included 1,800 at its Bochum plant, 2,500 at Rüsselsheim, 300 at Eisenach and 300 at Kaiserslautern. The Vauxhall facility at Ellesmere Port would be unaffected, as would Gliwice in Poland, Franz said.

“The competition in this industry is intense and getting fiercer every day and we have to reduce our structural costs so we can make money in a lower market,” said Reilly.

Reilly said Opel needs around €3.3 billion ($5.0 billion) in funding in the coming two years. GM wants European countries like Germany, Britain, Poland and Spain where it also has factories to provide the money, but it said on Monday that it would restructure the auto maker without state help if needed.

Germany came under fire from other European governments for offering €4.5 billion in state aid to support GM’s original plans to sell Opel, which includes Vauxhall in Britain, to Canada’s Magna and Russian lender Sberbank.

Other countries believed that Berlin was offering the money in order to ensure that Germany would be spared large-scale job cuts or plant closures. GM has since walked away from the deal, to Germany’s consternation.

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