GM guarantees Opel jobs after unions agree to factory closure, pay freeze
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FRANKFURT -- General Motors Co. today agreed with labor leaders to guarantee the jobs of more than 20,000 German workers at the company's Opel unit in exchange for the closure of the Bochum factory and a freeze in wages.
Unions agreed to the closure of the Bochum at the end of 2016. The factory in Germany's Ruhr valley manufacturing area builds the Zafira minivan and employs 3,300 workers.
German wage increases, put on hold in November as part of the negotiation process, will be postponed through 2015, Opel said in a statement. An agreement to refrain from large-scale firings until the end of 2014 will be extended through 2016 as part of the deal.
GM also will keep part of its facility in Bochum as a components and logistics center after auto production stops four years from now. The decision will secure about 1,200 of the location's jobs.
"General Motors fully supports Opel and is securing the necessary financing for the coming years, until we can once again return to profitability," Stephen Girsky, head of Opel's supervisory board and acting head of GM Europe, said in the statement.
GM Europe, which includes Opel and the UK brand Vauxhall, has lost $18 billion since 1999, including a $1.8 billion deficit last year. GM reiterated targets on Feb. 14 for the division to improve earnings this year, helped by new models such as the Mokka and Adam, and to break even by 2015.
Girsky pressed for a labor agreement this month before former Volkswagen manager Karl-Thomas Neumann takes over as Opel chief in March to lead the turnaround. Girsky, who is GM's vice chairman, will also hand over his role at the Detroit-based carmaker's European business to Neumann.
European deliveries by Opel and Vauxhall plunged 16 percent last year to 834,790 vehicles, almost double the 7.8 percent industrywide contraction. The brands have a target of keeping their European market share stable this year after a drop to 6.7 percent in 2012 from 7.3 percent in 2011.
Opel plans to roll out 23 new products from 2012 to 2016, including the South Korea-built Mokka compact sport-utility vehicle, the Adam small car produced in Eisenach, Germany, and the Cascada convertible coming to showrooms in April.
GM employs 40,000 people in Europe, including 22,000 in Germany. Girsky threatened in January to close the Bochum assembly plant by the beginning of 2015, two years earlier than planned, as no recovery is seen soon in Europe's car market.
GM's efforts to return to profitability in Europe include a vehicle-development and parts-procurement alliance agreed to last year with Paris-based PSA/Peugeot-Citroen, Europe's second- biggest carmaker. Projects will include sharing the underpinnings of three compact and small-car lines.
Bloomberg and Reuters contributed to this report
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