May 29, 2018 / 7:33 PM / 3 months ago

UPDATE 1-Opel agrees job guarantees, investments at German sites

(Adds details on agreement)

BERLIN/FRANKFURT, May 29 (Reuters) - German labour leaders on Tuesday agreed with PSA Group’s Opel unit on an investment plan and job guarantees for German factories in return for wage concessions.

PSA Group, which bought Opel from General Motors for $2.6 billion last year, is aiming to restore profitability by 2020 after two decades of losses at the unit.

Workers at German production sites in Ruesselsheim, Kaiserslautern, Eisenach, Dudenhofen and Bochum will have their jobs guaranteed until July 2023 and investments have been budgeted for each site, according to a joint statement by the company, its works council and trade union IG Metall.

In return, the labour side agreed for pay rises under a industry-wide collective bargaining agreement to be delayed until 2020.

The agreement said job cuts would be limited to 3,700 employees and that it would only be based on voluntary leave programmes, adding that around 3,500 employees had already accepted such offers.

As of mid-2019, the Grandland X model, including a hybrid version, would be allocated to be built at the Eisenach plant and job cuts would only affect 450 people of its 1,800 workforce there, the company said.

Work leaders had feared the plant’s workforce would halve after the management had made allocating a new model conditional on workers’ concessions on pay.

“With these cornerstones, we finally got what we have been demanding for a long time,” works council chief Wolfgang Schaefer-Klug said in a statement.

German labour leaders had warned last week they would escalate the dispute with management and call staff for demonstrations at the German sites unless progress is made towards an agreement.

Labour representatives said they would lift their blockade of the existing voluntary leave applications, the agreement said, but the buyout programme would stop except for workers at three divisions.

Voluntary redundancies had been suspended two weeks ago, after staff representatives warned that a wave of departures following PSA Group’s takeover could leave it short of skilled workers.

“With today’s agreement, important prerequisites have been achieved, although the negotiations were very intense and complex,” Joerg Koehlinger, an IG Metall regional director said in the statement on Tuesday.

Opel Chief Executive Michael Lohscheller said the agreement will help Opel to increase its competitiveness in the auto industry.

“We are looking ahead after delivering on our commitment to not close any plants or announce any forced redundancies,” Lohscheller said. (Reporting by Riham Alkousaa and Ludwig Burger; editing by David Evans)

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