PSA's honeymoon with the work force at its German subsidiary Opel appears to be over, and the timing couldn’t be worse.
Just as PSA, which took control of Opel roughly a year ago, aims this week to put its signature on a new labor deal that would eliminate 3,700 German jobs in exchange for guarantees until 2023, news reports surfaced that management plans to sell large chunks of the carmaker’s engineering center.
The plans, which would affect an additional 4,000 white-collar employees, equated to "suicide" in the eyes of Opel works council boss Wolfgang Schaefer-Klug.
Convening a hastily arranged news conference, Schaefer-Klug told reporters Thursday that activities at imminent risk include everything from vehicle and powertrain development to all of Opel’s test-bench facilities, toolmaking and even its proving ground in Dudenhofen.
"It's not just a problem for the employees," Schaefer-Klug said in front of the gates of Opel’s home plant in Ruesselsheim. "We consider this a threat to the very existence of the Opel brand, and we plan to defend ourselves with all measures at our disposal."
Partially drowned out by trucks driving in and out of the factory, Schaefer-Klug’s words marked a distinct departure from his preferred style of subdued leadership.
The bookish works council boss with a doctoral degree has spent most of his past six years deliberately avoiding the spotlight, preferring to settle conflicts behind closed doors.
Unlike Klaus Franz, his combative predecessor, Schaefer-Klug believes that involving the broader public would be counterproductive. Interviews and public statements can call management’s authority into question, and escalate a conflict. They also give labor few face-saving options to climb back down from their catalog of demands and tempt executives to respond with a politically motivated decision rather than a sensible one.
In terms of pure numbers, even just a partial sale is as bad as if Opel were to close manufacturing operations at its historic Ruesselsheim headquarters, which employs 4,000 blue-collar workers.
At last count, the neighboring engineering center’s 7,000 employees represent a fifth of Opel’s entire work force, unusually high for a car company and a legacy of the center’s former importance to previous owner General Motors.
Its future under PSA is a major concern now that it no longer would has global responsibility for developing compact and midsize passenger-car platforms for GM.
When Opel CEO Michael Lohscheller said he wanted to refrain from compulsory layoffs across all sites last November when presenting his restructuring plan, the relief was palpable, and Schaefer-Klug’s demeanor was decidedly upbeat.
In March, however, PSA unveiled a production plan that largely excluded Germany, raising suspicions that Opel’s German identity was being undermined.
News of a possible partial sale of most of the Ruesselsheim engineering center now threatens to ignite controversy at the wrong time.
The capacity for further pain is extensive at Opel, a company that has been largely ensnared in one restructuring plan after the other since 2001. But it is not limitless.
Speaking Thursday to the very TV cameras he typically had eschewed in the past, Schaefer-Klug threatened that if needed, he would discuss with IG Metall union bosses in Frankfurt the possibility of industrial action.
The pragmatic executive, however, also extended an olive branch to Lohscheller -- and the Opel CEO would be wise to take it.
"There's always a middle ground, but [management] needs to speak openly with us and not present us with a fait accompli," Schaefer-Klug said. "We want a say. We believe there are better options than simply being sold to French engineering service providers."
When PSA Group CEO and Opel Chairman Carlos Tavares came to Ruesselsheim in November to underline the parent's support for its new ward, he emphasized his sense of responsibility to the work force.
"I'm standing here in front of you this morning with Michael [Lohscheller] because we are committed to bringing a solution to the Opel employees. They are expecting us to finally create a sustainable solution for this company," Tavares said. “We are eager to work with our union partners, we are eager to make this a success with them, and we are eager to listen to them and their ideas."
Now its time for Tavares to honor those words.
Schaefer-Klug understands unpopular decisions are inevitable, but his people will fight against any plans for a wholesale erosion of the company’s substance, which, ultimately, would benefit neither side.