Labor leader says costs for Opel’s Bochum plant closure could reach EUR1 billion

Article by Anita Panait, on June 19, 2012

General Motors Co. would have to spend up to EUR1 billion if it decides to shut down its Bochum plant in Germany, labor leader Rainer Einenkel told Westdeutsche Allgemeine Zeitung. Einenkel divulged that Opel, a GM European unit, has set aside around EUR500 million to cover the cost of job cuts if the Bochum site is closed.

The labor leader remarked that the cost could be higher since Opel also has to cover general closure costs and restructuring costs, which would increase the figure to around EUR1 billion. Einenkel noted that the Bochum plant, which employs 3,300 people, had the highest capacity utilization of all Opel sites in Germany and was the only factory in the country making a profit.

Einenkel derided Opel on its plans, describing it as “perverted and sick,” adding that the money associated with the plant’s possible closure could be better spent on model development and further production at the Bochum site.

Opel is currently holding talks with labor unions to shut down Bochum after production of the Zafira minivan ends and in return the company would guarantee jobs at its German plants until 2016.

GM’s decision to close Bochum is part of the pledge made by chief executive Dan Akerson to plug the company’s continuous losses in Europe. GM posted an adjusted operating loss of $256 million in Europe as well as $590 million in write downs for the first quarter.

In protest of the plan to close the Bochum site, around 2,000 workers walked out of an assembly on Saturday, Westdeutsche Allgemeine Zeitung reported.

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