Soon after Opel workers rejected a wage freeze, the company proceeded with plans to shut down its auto plant in Bochum, Germany, at the end of 2014. This is the first time for an auto plant in the country to close since World War II. In a statement, Opel said that its supervisory board approved the decision made by the managers to stop the production of the car at the site.
Since 1999, GM's European operations (including Opel's UK sister brand Vauxhall) have incurred a total of $18 billion in losses. GM has promised that by 2015, it will be able to break even. On April 10, it announced plans to make an investment of 4 billion euros ($5.2 billion) primarily to release 23 new models as well as 13 engines over three years.
Opel is hoping for a turnaround while the European market has been on the decline for six straight years. Industry association ACEA said that the combined Opel and Vauxhall sales in the region in the first quarter fell by 8% to 208,994 units. Deliveries in Europe fell by 10%. Bochum employees voted last March to shoot down a plan to forego pay increases instead of sustaining output until the end of 2016 of the Zafira minivan at the site.
GM tied the deal to a plan for the expansion of a logistics center at Bochum and scrap automaking and replace it with the production of parts are 2016. This would keep 1,200 of the more than 3,000 jobs in this factory. Opel spokesman Ulrich Weber said that after the workers threw out the concessions, the employment-preservation plan has now been taken off the table.
He said that Opel doesn’t have any plans of winding down the Bochum logistics center. Last March, Opel workers at its other four German plants agreed for wages to be freezed in exchange for GM’s promise to put a stop to mass firings until the end of 2016. Opel hasn’t said yet if it intends to close more plants aside from Bochum.