GM: future of Belgian Opel plant is uncertain

By LAURA STEVENS

posted: 10 HOURS 42 MINUTES AGO

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RUESSELSHEIM, Germany -An Opel plant in Belgium faces an uncertain future as General Motors moves to restructure its European operations, a drive expected to cost some 9,000 jobs across the continent, a top executive said Wednesday.

Nick Reilly, the head of GM Europe, detailed GM's plans to employee representatives from Opel and sister brand Vauxhall. He stressed that action is needed because "the competition in this industry is intense and getting fiercer every day."

"Overall, we are going to reduce our capacity by around 20 percent, and we expect to reduce the number of people by approximately 9,000," he told reporters after the meeting at Opel's headquarters.

Reilly did not give an exact breakdown of how many jobs might go where, but he said that "probably between 50 and 60 percent" of the cuts would be made in Germany.

Opel employs around 45,000 people in Europe, about 25,000 of them in Germany. Reilly made clear in meetings with German officials Tuesday and Wednesday that Opel's four plants in the country will remain open.

Chancellor Angela Merkel praised GM's decision to keep all German plants open as positive, despite the job cuts.

"I hear from General Motors that there are plans to restructure the German plants, but they will all have a good perspective" for the future, Merkel said after talks with Spanish Prime Minister Jose Luis Rodriguez Zapatero, who also praised GM's plan for giving a perspective to the plant in Spain.

However, it is unclear whether the Antwerp, Belgium, plant will survive.

"We have agreed to set up a work group on the Antwerp plant because the future of that plant is uncertain," Reilly said. "So we have agreed to consider and consult on alternatives for that plant."

Reilly did not say what those alternatives might be. Opel produces its Astra model in Antwerp, which also had been threatened under a now-abandoned plan for GM to sell a majority in Opel.

"It's not good times for us," said Marc Schelkens, a worker at the Opel factory in Antwerp. "The chances that we are really going to be building cars is really very small."

Unions had hoped that the company would start making SUVs at the plant — but that now seems unlikely. The factory is currently only operating four days a week.

Eddy De Decker of the ACV Metaal Union said workers' representatives would "keep pushing for a proper alternative whatever happens" to keep the plant alive.

Antwerp residents aren't so sure: Ludo Goosens said he didn't "think there's a future for the automobile industry here to be honest."

The head of Opel's employee council criticized the plans. Klaus Franz said worker representatives and Germany's IG Metall union "will not accept this approach of pushing through Opel's restructuring in Europe essentially at the expense of Belgium and Germany."

Reilly acknowledged that the overhaul would involve "some difficult decisions."

"It does not mean that any individual or any groups of individuals are doing a bad job," he said. "It's just facing the reality of today's market."

He stressed that "no final decisions" have been taken pending consultations on the restructuring plan, and acknowledged the need to conclude those soon following months of uncertainty over Opel's future.

"We stressed that we must get this phase over as quickly as possible because the uncertainty that's been hanging over some parts of Opel and Vauxhall is doing nobody any good," Reilly said. He added that he hoped to conclude consultations within two or three weeks.

He told reporters that GM would try to cut as many jobs as possible through voluntary resignations.

General Motors Co. shocked European governments and employees earlier this month by abruptly canceling the planned sale of a majority in Opel to a consortium of Canadian auto parts maker Magna International Inc. and Russian lender Sberbank.

GM originally agreed to the deal at a time when it was headed toward bankruptcy protection. Since then, it has cut its debt, scaled back operations and seen car sales stabilize.

The sale was ditched partly over fears that GM would lose control of Opel-designed technology, which includes next-generation designs for some key cars to be sold in the U.S.

On Monday, GM asked European governments to help pay most of the euro3.3 billion ($4.9 billion) it needs to restructure its European operations.

EU nations where GM has plants have vowed to avoid individual negotiations with the company before a Dec. 4 meeting at which they will coordinate their response to GM's plans.

"We do expect some contributions from employees, and we are hopeful that we will get some funding help from governments," Reilly said Wednesday. "We have also said that GM can and will put some money in as well."

Franz complained that GM wanted workers to make contributions worth euro265 million without receiving extra rights in return.

Employees had offered cost-cutting concessions to ease the scrapped Magna deal, which would have given them a 10 percent stake in Opel.

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Associated Press Writer Geir Moulson contributed to this report from Berlin.

2009-11-25 15:47:44