Plant will close; 2300 jobs to go; more cuts to come
21 January 2010

Opel has confirmed it will shut its plant in Antwerp, Belgium.

The move is the first part of a restructuring of Opel and Vauxhall in order to reduce capacity, which will result in 8000 job losses. Closing the Antwerp plant will result in 2300 job losses.

“We fully understand the effect this announcement has on the Antwerp employees and their families and we sympathise with them,” said Opel CEO Nick Reilly. “Many have been dedicated to the plant over generations and have done an excellent job producing great quality cars.

"The decision to announce this today was not taken lightly; instead, it is the unfortunate result of the current business reality. We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations.”

The closure of the plant is now subject to a consultation priod. Opel said in a statement that, if the closure is confirmed, production would conclude in the next few months.

Opel's statement added: "It is expected that the full restructuring plan, when completed, will affect all Opel/Vauxhall production sites and entities through measures such as capacity reductions, job redundancies and/or labour cost reductions."

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Comments
7

21 January 2010

How sad. Reilly's No.1 job was to slash European jobs as fast as possible to bolster GM Detroit HQ's bottom-line results, for its public re-flotation in July, which was all intended for Obama and the Democrats to be able to say 'look, we've sorted out the taxpayer-burden GM and the Great Recession has now been overcome, thanks to us. Now go out and show your appreciation by voting us back in in the Mid-term elections'.

Only one small problem - the Massachusetts senatorial election earlier this week - which showed Obama and the Democrats as a busted flush. So the Flemish people(Antwerp plant) and others will pay for the policy of a discredited administration, yet all in vain.

21 January 2010

Looks like Reilly is making tough decisions now to save 40,000 other European jobs. Although he may have cut the wrong jobs/shut the wrong factory.

According to GM, workers in Saragossa, Spain, need on average 19.5 hours in order to produce a car; in Ellesmere Port, this is 23.2 hours; in Bochum, 24.4 hours, and 33.1 hours at Opel’s Ruesselsheim plant.

Source: Reuters

You don’t need a weatherman
To know which way the wind blows
—Robert Allen Zimmerman

21 January 2010

Forget the internal politics at GM, the blunt reality is that European capacity was way over demand before the recession, never mind now. Difficult as it is in human terms the stark truth is that capacity needs to be cut or even more sites will suffer a long, lingering death.

The politics come in when they start deciding where to make the cuts. Belgium, like the UK, is easier to lay workforces off - Renault did it to huge popular anger in the early 90's. German labour laws make it prohibitively expensive to make redundancies.

21 January 2010

[quote CambsBill]Forget the internal politics at GM, the blunt reality is that European capacity was way over demand before the recession, never mind now.[/quote]

Yes, we know there is overcapacity but the decision to shut Antwerp is primarily politically driven, not economic - not medium to long term economic considerations anyway.

It has been reported that the Flemish offered GM as much as $500m equivalent to support the Antwerp plant, i.e. keep it open. That's a lot of money. But GM is still going ahead with closure. This can only be an at most six month time frame(expected July refloatation date), that is, show the maximum fixed cost reduction on the books by headcount reduction for the flotation prospectus and as a bonus show to the US Car Czar, the American political establishment and the American public that GM is kicking ass in Europe, in order to get itself in shape in its home, core business, all for the purpose of repaying the American taxpayer - as Ford would say 'Job 1 - repay the US taxpayer'. That's all that matters now, even if a European region offers a huge sum of money, relative to the region's size, to keep one plant open for the medium to long term.

That in my opinion is what is going on here - see what Obama is doing grandstanding with the banks just today. He and his administration know that unless they can turn around the perception with the US public that they are in thrall to Wall St and have a Bailout policy for non-banking large corporations, 'those too big to fail', like GM, then they will be out on their asses come November and Obama can kiss goodbye any hope of a second term.

As said above Antwerp is the easy part for Reilly. The German part remains same as it was 12 months ago and more. In my opinion Reilly hasn't got a hope in hell of making substantial cuts, that reflect on GM's bottom line by mid 2010, which is what his actual task is. This has all been a phony war until now. Now the gloves come off and Reilly must show his true hand.

21 January 2010

[quote BigEd]That in my opinion is what is going on here - see what Obama is doing grandstanding with the banks just today. He and his administration know that unless they can turn around the perception with the US public that they are in thrall to Wall St and have a Bailout policy for non-banking large corporations, 'those too big to fail', like GM, then they will be out on their asses come November and Obama can kiss goodbye any hope of a second term. [/quote]

OK , so you don't like Obama , so would you prefer to have George w back ?

I think there are EU rules about countries bailing out their Auto Industries. These rules don't apply to bailing out banks , as banks don't make anything.

21 January 2010

[quote Uncle Mellow]OK , so you don't like Obama , so would you prefer to have George w back ?[/quote]

For heaven's sake, this isn't a Repub/Dem thing - to me. I'm not American, I can't vote, so it's immaterial. The point is it's high politics that's driving GM's decisions in Europe. Why else would GM turn down half a billion dollars? Why, because that money would only be available, cashed onto GM's accounts, in the medium term, that is, long after the refloatation deadline in expected July this year. Anyways, as to not liking Obama, I think I can let the people of Massachusetts speak for that - thee most Democrat state elects a Repub senator - sending shockwaves through the Obama Administration/Democrat Party establishment. America, ordinary, real America, as far as I can see, has had enough of being ripped off by the bankers and the large corporations, and Obama and his advisers, need desperately and urgently to demonstrate - if only cosmetically - to ordinary Americans that they are 'on their side'. So, as I said, 'Job 1' - get the loans to GM paid back. pronto, to the US taxpayers, which means GM slashing costs like yesterday - Saab, Opel Antwerp, etc..

22 January 2010

[quote BigEd] I'm not American, I can't vote, so it's immaterial.[/quote]

Cart, there is a God after all.

Simple fact is, money losing plants are being closed, high cost labor will be cut for practical business reasons not some loony political conspiracy. Reilly is hiding nothing; he has stated from the outset that Antwerp would be closed, 4000 German jobs will be cut and the other 2000 will be split between Spain and the UK, sobering facts I know, but facts none the less.

You don’t need a weatherman
To know which way the wind blows
—Robert Allen Zimmerman

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