Opel continues to struggle for a turnaround.
Adam Opel AG, the heart of General Motors European operations, is apparently preparing to take a meat ax to its administrative staff in Germany.
Opel, which is now under new management following the latest corporate shake-up, wants to cut 1,000 of 3,300 administration jobs at its Ruesselsheim, Germany, headquarters, according to Frankfurt Allgemeine Zeitung which cited two supervisory board members who didn’t want to be named.
GM recently put its Vice Chairman Steve Girsky in charge of coming up with a turnaround plan for its European operations – hoping to stem losses that are expected to reach between $1.5 billion and $2 billion this year, the 13th consecutive annual loss for the subsidiary.
Unlike in the U.S. a large percentage of the white-collar, headquarters staff is represented by IG Metall, the same German metalworkers union which represents Opel’s blue-collar workers and which has been tussling with GM over the scope of other cuts proposed by the automaker.
An Opel spokesman said the company aims to lower costs, and personnel costs are a part of that. “We are currently in talks with employee and IG Metall union representatives,” the spokesman said, but didn’t want to comment on specifics FAZ reported.
GM also is proposing closing an assembly plant in Germany to bring costs into line. But that may take as much as two years to accomplish due to union contract restrictions.
GM’s European Operations, which have piled up more than $16 billion in losses in the past 15 years, has been described as GM’s most pressing problem. The crisis at Opel and GM Europe grew to monumental proportions under former GM chairman Rick Wagoner but Wagoner’ successors haven’t yet been able to fix the problem.
Last week, analysts at Morgan Stanley said in a note to investors GM should close or sell Opel as quickly as possible and absorb the losses. Opel has been part of GM — save for a long period during World War II when it was cut off from GM headquarters in Detroit — since the 1930s.
GM is implementing a range of measures aimed at stemming financial losses at its European operations.
The FAZ article adds that the job cuts will take place soon, but the company wants to avoid forced redundancies.
One way to reduce jobs would be through a government subsidized program whereby employees born between 1955 and 1957 can reduce their working hours to 80%. Another way would be to offer voluntary buyouts, the newspaper article says.
GM came close to selling off a majority stake in Opel following the U.S. maker’s 2009 bankruptcy. That deal was scuttled, at the last minute, by a group of board members including Girsky and Dan Akerson, the latter now the company’s chairman and CEO. There have been no indications GM is planning to again put the subsidiary on the block.