GM faces huge costs if Bochum plant shut - works leader

Bochum, Germany Sat Mar 31, 2012 9:44pm IST

A clock shows five to twelve next to an Opel logo at the Opel plant of Bochum in March 28, 2012. REUTERS/Ina Fassbender

A clock shows five to twelve next to an Opel logo at the Opel plant of Bochum in March 28, 2012.

Credit: Reuters/Ina Fassbender

Stocks

   

Bochum, Germany (Reuters) - Labour leaders at loss-making European car maker Opel have warned parent company General Motors (GM.N) that closing one of its oldest factories in Germany would be massively costly and damage the company's image.

"This would cost GM billions," Rainer Einenkel, head of the Bochum plant's works council said at a news conference on Saturday following a staff town hall meeting in the western German city of Bochum.

GM, which has been pushing Opel to lower costs by shifting production from high-wage countries in western Europe to emerging markets, may have to shoulder huge costs for severance pay and legal proceedings, said Einenkel.

Closing Bochum, a plant in the Ruhr industrial heartland that has been producing cars for 50 years could also severely damage Opel's brand, said Einenkel who also sits on the car maker's supervisory board.

The 20-member board met last Wednesday to discuss ways to move Opel into profit, but adjourned deliberations without agreement on painful restructuring steps.

Opel's Bochum factory emerged as symbol of Germany's post-war economic recovery after it started production of Opel Kadett coupe, a rival to the Volkswagen VOWGp.DE Beetle, in an area devastated by the closure of coal mines. Its 3,100 workers make the Zafira and Astra models with capacity to produce 160,000 vehicles a year, according to the company's website.

Although General Motors has pledged not to close plants before the end of 2014, Einenkel said GM's demands centred on closing between two and three factories.

"No factory is safe," he said.

Analysts say the car plants in Bochum and Ellesmere Port in northwest Britain are most at risk.

Opel's works council chief said GM would struggle to find an investor for Bochum, because the site also required a heavy investment to clean up the site, built on a former coal-mine.

(Reporting By Andreas Cremer)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage