Opel likely to cut down manufacturing in Europe

Frankfurt/Detroit:  General Motors' Opel managers will present a business plan next Wednesday to the unit's board that likely will involve closing two plants in Europe to reduce manufacturing capacity by some 30 per cent, people familiar with the company's thinking said on Thursday.

"GM has been saying repeatedly that, with excess capacity equivalent to 500,000 cars annually, we have two plants too many and the new head of manufacturing has been visiting one site after the other, playing them off against each other," said one sup-ervisory board member from the labour side, who asked not to be identified.

"We know the main points of the business plan that may be presented on Wednesday, and it foresees plant closures and no growth of the company," the board member added. "If it's put to a vote, then the entire labour bloc will vote against this plan."

A GM spokesman declined to comment on talk of closing plants, but repeated the US automaker's previous statement that executives are working closely with the unions and works council to improve profits.

Room for compromise

A person at the company said no decision had been taken on closing plants in Europe, but added management's room for compromise was increasingly limited by extremely harsh market conditions on the continent.

"Business in Europe is pretty dire for the industry overall at the moment and there's no end in sight," the company source said. "When it's this bad you have to take action, so it's not so much what we want or what the unions want — it's the environment that is driving this.

"It doesn't allow much more time to lose."

Employee delegates cannot block any decision by senior GM executives sitting on Opel's board, since they lack the majority.

But they warn that should GM executives approve any such plan from Opel's management on Wednesday, it would ruin efforts to find common ground and turn stalled negotiations into outright war.

GM's plants in Germany's Bochum and Ellesmere Port in the UK remain the most threatened, although Opel Chief Executive Karl-Friedrich Stracke said this month he would honour an agreement not to shut any sites through the end of 2014.