FRANKFURT -- General Motors Co. may face costs of up to 1 billion euros ($1.26 billion) to close a factory in Bochum, Germany, according to a labor leader.
GM's Opel unit has earmarked 500 million euros to cover the cost of cutting jobs if Bochum is shuttered, yet the cost could be higher, according to Rainer Einenkel, who heads the plant's works council.
"If you include general closure costs and restructuring costs, that will reach about 1 billion euros," Einenkel was quoted as saying in an article published in the Westdeutsche Allgemeine Zeitung today.
Einenkel said Bochum had the highest capacity utilization of all Opel car factories in Germany and was the only one in the country making a profit.
"What kind of perverted and sick policy is it to pay 1 billion euros when one is meant to be broke…this money could be better spent on model development and further production in Bochum,'' Einenkel was reported as saying.
Opel is negotiating a deal with labor unions to close Bochum after production of the Zafira minivan ends, in exchange for guaranteeing jobs in its German plants through 2016.
The plant has 3,300 workers.
GM's decision on Bochum is part of CEO Dan Akerson's pledge to stem European losses he says are weighing on the automaker's shares. The Detroit-based company posted a first-quarter adjusted operating loss in Europe of $256 million and also had $590 million in write downs.
To protest the plan, around 2,000 workers walked out of an assembly on Saturday at the factory where Opel CEO Karl-Friedrich Stracke was due to address them.
Opel's management briefed Einenkel ahead of the assembly on Saturday, according to the Westdeutsche Allgemeine Zeitung.
Bloomberg and Reuters contributed to this report