Opel to freeze pay as Ford's Belgian workers agree on severance
HANOVER, Germany (Bloomberg) -- General Motors Co. and Ford Motor Co. won employees' approval in Europe for labor-cost cut plans to restore earnings in the region in response to a recession that's reducing vehicle sales.
Manufacturing workers at Ford's plant in Genk, Belgium, and its suppliers will end walkouts after agreeing to severance packages of as much as 2 1/2 years of pay when the factory shuts in 2014, the company said Friday in a statement.
A pay freeze at GM's Opel brand in Germany received the backing of employees at three of the unit's five plants, the IG Metall union said separately.
Industrywide European car sales are set to fall a sixth consecutive year in 2013 after reaching a 17-year low in 2012 as a sovereign-debt crisis grips the region.
The 4,300 positions that Ford is cutting at Genk are part of a combined 30,000-job reduction outlined since mid-2012 by auto manufacturers such as PSA/Peugeot-Citroen, Renault and Opel.
"We are pleased to have reached a social plan agreement that was accepted by the unions and approved by the hourly employees at Genk," Philippe Verbeeck, operations manager for Ford at the plant, said in the statement. "We fully recognize that this has been a difficult time for everyone at the Ford Genk plant, our suppliers and the local community."
Genk production restarts
Production at the Belgian factory has been halted by labor disputes, including strikes by workers at component makers, since Ford announced plans in October to shutter the site and and two plants in the UK.
Ford on Monday restarted assembly lines at Genk, which builds the Mondeo mid-sized car as well as the S-Max and Galaxy minivans. "Our sales in the first two months of the year were significantly affected by the lack of consistent supply of the Mondeo, S-Max and Galaxy so this is welcome news for Ford, our dealers and our customers," Ford of Europe's sales and marketing head, Roelant de Waard, said in a statement on Monday. "We have strong demand for these vehicles and will now move quickly to fill orders and meet the demand."
Opel workers at the GM division's plants in Ruesselsheim, Kaiserslautern and Dudenhofen voted with majorities exceeding 83 percent to keep pay at current levels through 2015 in exchange for securing their jobs. Workers in Eisenach will vote in the coming days, while negotiations at the plant in Bochum, where vehicle production is scheduled to end in 2016, are continuing, IG Metall said.
"A negative vote, or a lack of a resolution in Bochum, doesn't mean that the contract can't be implemented at the other sites," IG Metall district leader Armin Schild said in the statement.
GM Europe, which includes Ruesselsheim-based Opel and the Luton, England-based Vauxhall brand, has lost $18 billion since 1999, including a $1.8 billion deficit last year. Ford lost $1.5 billion in Europe in 2012, and expects the figure to widen to $2 billion this year.
Opel has laid out plans to convert the plant in Bochum to a parts-production and logistics operation, which would secure 1,200 of the more than 3,000 jobs at the site.
Rainer Einenkel, head of the plant's works council, said on March 1 that he didn't support the broader labor agreement with Opel management.
GM Europe has a target of improving earnings this year, helped by new models such as the Mokka subcompact SUVs and Adam minicar, and aims to break even by 2015.
Opel, led by former Volkswagen AG manager Karl-Thomas Neumann since the beginning of this month, will refrain from mass firings to reduce the 20,000-employee work force in Germany under the pay- freeze agreement.
Steve Girsky, the GM vice chairman in charge of European operations on an interim basis until Neumann took over, threatened in January to close the Bochum assembly plant by the beginning of 2015 if the Opel employees didn't agree to concessions.
Girsky has said repeatedly that Detroit-based GM supports Opel's turnaround plan.
Renault, France's second-biggest auto manufacturer, agreed with labor leaders on March 13 on cutting its domestic work force by 17 percent and freezing pay in exchange for a pledge not to close plants for three years.
Larger Paris-based competitor PSA/Peugeot-Citroen is also seeking a 17 percent reduction in jobs at its French plants, including 3,000 posts that disappearing when it closes a factory in Aulnay in late 2014.Contact Automotive News