General Motors is heading for a fresh confrontation with its European trade unions and workforce after a report that it was considering closing two of Opel’s plants in Germany and the UK.

Under a restructuring plan negotiated in 2009-10, GM closed Opel’s plant in Antwerp and cut 8,300 staff in Europe. As part of that plan, unions agreed to shoulder €265m worth of cost savings a year until 2014.

But the Wall Street Journal reported that GM executives were preparing a new plan for the carmaker’s lossmaking European operation. It said that GM was considering closing its plants in Bochum, Germany and Ellesmere Port, England.

Opel’s works council said on Wednesday that it had not been informed of any plans to close plants, which they said would violate their existing agreements with GM. “These rule out the closure of plants and compulsory redundancies for all European sites until the end of 2014,” Wolfgang Schäfer-Klug, the body’s chairman, said.

Opel’s management said only that it “needs to operate profitably in a challenging environment,” and was discussing options, but would not comment further on its plans.

The leaking of GM’s deliberations in Detroit, if true, will reopen raw wounds at Opel, based in Rüsselsheim near Frankfurt. Workers there still nurse bad memories of GM’s failed attempt to sell Opel to a Canadian-Russian group in 2009.

GM wanted state aid to restructure and sell Opel, and the negotiation turned into a tug-of-war within the company’s European workforce and among governments offering state aid for the deal over where the cuts would fall.

GM abandoned the sale, infuriating its union leadership, which wanted to restore Opel’s status as a standalone German carmaker. The fracas damaged Opel’s market share in Germany, its biggest market, and contributed to Fritz Henderson’s departure as chief executive in December 2009.

Over the past year, GM’s European employees have been baffled or angered by reports citing unnamed GM sources saying that the Detroit carmaker might put Opel up for sale again.

“These rumours keep being started,” Rainer Einenkel, Opel works council head for the Bochum plant, told Germany’s WAZ media group. “It is certainly a question who is deliberately damaging the business like this.”

Mr Einenkel and officials at Britain’s Unite union did not respond to requests for comment on Wednesday.

Unlike most of its similarly hard-pressed rivals, including Fiat and Renault, Opel has only negligible sales outside western Europe’s structurally declining car market. The unit is expected to report a significant fourth-quarter loss when GM discloses financial results next week.

Among Opel’s European competitors, France’s PSA Peugeot Citroën is cutting 6,000 jobs and came under fire recently after a leaked report that it might close its plant in Aulnay, outside Paris. Sergio Marchionne, chief executive of Fiat, last week disclosed a €500m loss for 2011 at the Italian group’s core European mass-market business.

Steve Girsky, GM’s vice-chairman and Opel’s chairman since November, is putting together a new board for the unit comprising senior figures from the carmaker including Dan Ammann, chief financial officer, and Mary Barra, GM’s head of global product development.

The shake-up has fuelled speculation that GM is preparing a second major restructuring of its European arm. “This would indicate that the company is foreseeing some major industrial unrest as a result of the expected restructuring plan,” IHS Global Insight analyst Tim Urquhart wrote on Wednesday.

Get alerts on General Motors Co when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article