Opel in trouble again

UScarmaking giant General Motors appears to be losing patience with Opel, after its European subsidiary reported losses of 440 million euros ($580 million) in the first three quarters of 2011.

According to a report in the Wall Street Journal on Wednesday, GM expects fourth quarter losses at Opel to be similarly "horrendous," and has called for further cost cutting efforts.

"There is increasing frustration with Opel, and a feeling that the cuts two years ago did not go nearly deep enough," the newspaper quoted a GM official as saying.

GM was even discussing the closure of its German factory in Bochum, the report said, and another at Ellesmere Port in England. The two plants have a combined workforce of 5,200.

"If Opel is going to get fixed, it is going to get fixed now, and cuts are going to be deep," the GM official is reported as saying.

Defiant labor unions

GM's European operations have lost more than $14.5 billion over the past decade, despite restructuring efforts, which included the closure of Opel's plant in Antwerp, Belgium.

An Opel spokesman told AFP news agency that the carmaker "must improve earnings at the level of margins, costs and revenues." In order to achieve that, management and labor representatives were scheduled to hold "strategic talks."

Opel's works council said it had no further information suggesting that GM would seek to violate [restructuring] agreements" struck in 2009. The agreements included the loss of 8,000 jobs out of 48,000 in Europe, but also guaranteed that there would be no compulsory lay-offs or further plant closures until 2014..

Works council chief Rainer Einenkel said he believed the "rumors" had been "strewn intentionally" to tarnish Opel's image.

In an e-mail to Opel employees Wednesday, chief executive Karl-Friedrich Stracke said that "no decisions about possible plant closures and layoffs have been made yet" - a form of words criticized by Einenkel as "ambiguous."

Author: Uwe Hessler (dpa, AFP)
Editor: Michael Lawton