General Motors Co. said in a statement that its German unit, Opel, kept a promise to its union by applying to change its legal form back to a stock corporation from its current limited liability designation.
The move allows employees share in the Company's future profits and gives Opel management board more work on key decisions regarding its products.
The change satisfies a demand by the union, which agreed to EUR265 million ($353 million) in annual wage saving in part as GM promised to change Opel to an Aktiengesellschaft (AG in German) from a Gesellschaft mit beschraenkter Haftung (GmbH in German).
Vice chairman of the Opel supervisory board and head of the works council, Klaus Franz, says the change of the legal form "is an important milestone for Opel." Nick Reilly, Opel's CEO, says the management board is happy to recognize the accountability it has. Opel workers had a strong say since almost EUR177 million of the yearly wage saving will come from Germany.
The change in Opel's corporate statutes means that staff will share in Company profits, which are expected in 2012, the company says. Opel, which includes the U.K.'s Vauxhall brand, will lose $1.9 billion in 2010, compared with a forecast of $3 billion at the beginning of 2010, Reilly said.
He adds the business has a shot of making money in 2011, excluding reorganization costs, and expects it to return to profit a year later. [via autonews - sub. required]