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Opel closes German plant

by Lou Whiteman | Published April 18, 2013 at 9:45 AM

The European arm of General Motors Co. on Wednesday, April 17, finalized plans to close a plant in Bochum, Germany, after the company was unable to win worker approval for a wage freeze deal that would have prolonged the facility's life.

Adam Opel AG in a statement said that its board had approved a manager's decision to wind down vehicle production at Bochum by the end of 2014. The action would mark the first shutdown of a German auto facility since World War II, according to local press reports, and comes as part of a broader effort by GM to stem losses and turn around its struggling European unit.

Workers at Bochum last month rejected a compromise that would have traded a wage freeze for company assurances that Opel's Zafira minivan would be manufactured at the site until the end of 2016. GM as part of that deal had pledged to expand a logistics center to Bochum and expand part production at the site by 2016, preserving some of the factory's job.

Detroit-based GM has had a shaky relationship with Opel in recent years. The automaker had planned to sell Opel during its 2009 government-assisted bankruptcy, but reversed course and instead committed to spend more than €3.3 billion ($4.3 billion) to restructure the business amid an overall decline in auto sales in Europe.

That decision has been criticized in years since, as the company has struggled to win long-term agreements with Opel labor and the unit has compiled billions in losses.

GM, meanwhile, has been attempting to build its North America-based Chevy brand in Europe, including signing a high-profile sponsorship deal with British professional soccer team behemoth Manchester United Ltd., leading some to believe the company is preparing to shed Opel in favor of selling Asia-built Chevys in the market.

But GM just earlier this month reiterated its commitment to Opel, pledging to invest an additional €4 billion to support its recovery.

Speaking to reporters at Opel's headquarters in Rüsselsheim, Germany, GM chief executive Dan Akerson said, "Opel is key to our success and enjoys the full support of its parent company."

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Opel closes German plant

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