The viability problem remains centered in Germany where half of Opel's workers are.
Some small steps toward implementing the latest Opel/ Vauxhall “viability plan” occurred today in Europe as the UK government announced a €300 million loan guarantee to help secure Opel/Vauxhall’s operations in Britain.
Discussions with governments in other European countries continue, and Opel “is hopeful” that it will make similar progress.
In Spain, local management and unions reached an agreement to implement the planned restructuring measures at the manufacturing plant in Zaragoza. The agreement, which still needs to be ratified, calls for the elimination of 900 jobs there.
“Today marks an important step for the future of Opel/Vauxhall,” said Nick Reilly, Opel/Vauxhall CEO. “This shows significant progress in our efforts to secure loan guarantees from European governments and to get support from our employee representatives. We very much appreciate the support of Lord Mandelson and the British Government, which is a vote of confidence in our company. I’m also grateful for the Spanish government’s role in moderating the discussions between management and unions resulting in the important agreement reached early this morning.”
Last week, General Motors announced that it would triple the investment it was willing to make in its money-losing Opel/Vauxhall subsidiary from €600 million to €1.9 billion or ~$2.6 billion of the $5 billion needed to fix the company.
Reilly said then that the latest offer, which was really a bargaining position already privately set forth to reluctant European governments – would now equal more than 50% of the overall funding required to keep Opel solvent and provide for the new products it desperately needs. The GM contribution would be made with both equity and loans.
GM has been seeking restructuring money from European governments since the fall of 2008 when it was becoming clear that it, along with its subsidiaries including Opel, were insolvent.
Notable in its absence of support is Germany, where resentment still runs deep over GM’s refusal last November to sell Opel to Canadian supplier Magna and Russian Sberbank. At the time, GM said Opel was of strategic importance because of its engineering services and European presence.
Opel has plants in Germany, the U.K., Spain and Poland and parts making operations in Hungary and Austria. The plan requires the sacking of about 17% of Opel/Vauxhall’s workforce. This means the elimination of 8,300 workers of 48,000, spread across most of Europe and includes 1,300 employees in sales and administration and 7,000 jobs in manufacturing. This includes closing of the Opel production facility in Antwerp, Belgium.
The German Central Government, regional government and the German Metalworkers union all had strongly supported the Magna sale as a way to preserve German jobs. And the union vow not to make any of the needed concessions without job guarantees.