Opel Workers’ Rejection of Compromise Deal Results in Plant Closure

Workers at Opel’s Bochum, Germany plant are feeling doubly betrayed after following the advice of their local union leader urging them to reject a compromise deal from the company that would keep the plant going for an additional two years beyond its originally-scheduled 2014 closing. Instead, following news of the workers’ vote, General Motors said there would be no more concessions or deals, and that the closure of the plant by 2014 would proceed as-scheduled, Reuters reports.

Einenkel had originally told the workers that they would be in a stronger negotiating position if they were to reject Opel’s compromise deal. But analysts are hailing GM’s resolve in sticking to its originally-scheduled closing of the plant, as record-low auto sales in Europe have left many automakers and Opel especially with an excess of production capacity. GM’s losses in Europe totaled $1.8 billion in 2012, marking the 13th consecutive year of losses for GM’s troubled German unit.

Even some Opel-branded models are being made outside of Germany and Europe, with the Opel Mokka compact crossover, similar to the recently-introduced Buick Encore, made in South Korea, along with the Encore. Initially, plans were to build the Mokka at GM’s plant in Antwerp, Belgium.

Opel’s Bochum plant builds the Opel Zafira minivan. Einenkel’s rationale in rejecting the compromise proposal is that the Zafira is in the middle of its model cycle, which would not run out until 2016, and that GM would not switch the manufacturing source on the model in the middle of its life cycle. But even demand for the once-popular Zafira has dropped off, with the Bochum plant being idled until April 3 on low demand.

Source: Reuters